Millennials Are Living in Expensive Neighborhoods

Millennials are living in some of the more expensive areas in Los Angeles. The recent UCLA Anderson Forecast revealed that the highest concentration of millennials are living in submarkets that command a higher rental rate and that have access to amenities. This includes neighborhoods that have walkability and access to public transit as well as retail and shopping amenities.

“The area where there are the most millennials command a higher price premium,” William Yu, an economist at the Anderson Forecast and an author of the UCLA Anderson Economic Forecast, tells GlobeSt.com. “I think that this must be because millennials are choosing to live in areas with higher cultural amenities and urban vibrancy. Those areas tend to command higher home prices. I think it is a good thing.”

The millennial propensity for urban amenities and density is nothing new. In fact, most of the multifamily developments in Los Angeles are driven by the trend toward urbanization. The price point, however, is surprising, considering that millennials are early in their careers. Yu, however, says that millennials also have more disposable income. “When I did the analysis, I controlled the education level,” he adds. “If you are young and have a good and decent income, you are willing to pay a higher home price.”

According to Yu, this trend helps to make a great case for density in Los Angeles. While there has been some community pushback against densifying L.A., millennials are attracted to these environments. “These urban dynamics and lifestyle is the trend for the future of Los Angeles. Some people are worried about building up jeopardizing amenities in Los Angeles, but I don't think that is the case for millennials,” says Yu. “Actually, you might bring in more cultural amenities, and that is good for the future of Los Angeles. By doing that, you will be able to attract more young, productive, educated, young people to Los Angeles. I think that is something that we are happy to see.”

Millennials are living in some of the more expensive areas in Los Angeles. The recent UCLA Anderson Forecast revealed that the highest concentration of millennials are living in submarkets that command a higher rental rate and that have access to amenities. This includes neighborhoods that have walkability and access to public transit as well as retail and shopping amenities.

“The area where there are the most millennials command a higher price premium,” William Yu, an economist at the Anderson Forecast and an author of the UCLA Anderson Economic Forecast, tells GlobeSt.com. “I think that this must be because millennials are choosing to live in areas with higher cultural amenities and urban vibrancy. Those areas tend to command higher home prices. I think it is a good thing.”

The millennial propensity for urban amenities and density is nothing new. In fact, most of the multifamily developments in Los Angeles are driven by the trend toward urbanization. The price point, however, is surprising, considering that millennials are early in their careers. Yu, however, says that millennials also have more disposable income. “When I did the analysis, I controlled the education level,” he adds. “If you are young and have a good and decent income, you are willing to pay a higher home price.”

According to Yu, this trend helps to make a great case for density in Los Angeles. While there has been some community pushback against densifying L.A., millennials are attracted to these environments. “These urban dynamics and lifestyle is the trend for the future of Los Angeles. Some people are worried about building up jeopardizing amenities in Los Angeles, but I don't think that is the case for millennials,” says Yu. “Actually, you might bring in more cultural amenities, and that is good for the future of Los Angeles. By doing that, you will be able to attract more young, productive, educated, young people to Los Angeles. I think that is something that we are happy to see.”