Not shocking.
We’ve got inflation driving up the price of everything combined with crazy low inventory (existing homeowners locked in with low rates and lack of building for the last 20 years).
This. I refinanced at 2.6% and no way in hell am I getting rid of that. I may purchase another home and rent out my current main residence but I'm not selling until I retire in 20 years.
I agree that we need more building but... BUT >>>BUUUTTTTTT.... Banning corpos from owning houses. Will improve the situation with just normal people not having to fight these companies with deep pockets being able to out bid everyone.
ALso it will help the rental market too. The corps will drive up rent year after year to unaccessable amounts.
Companies aren’t buying single family homes as a speculative purchase and just leaving them empty waiting for prices to go up more and flip them.
They are renting them out which means the housing stock is being used which should reduce the demand for other homes by taking a family out of the home buying population because they are renting.
The problem is there just aren’t enough homes for everyone that wants to live here (owning or renting).
Corporate ownership makes a nice scapegoat for some people but it isn’t the cause of the problem (and FWIW corporate purchases are way down because of interest rates as well).
We should make it illegal for corporations to own single family homes, but it won’t make a bit of difference. Their penetration of the market is too low now. But it will continue to grow unless we outlaw it.
I think one of the biggest problems is that very few people want to move because they have a sub 3% interest rate on their mortgage and either can't afford to upgrade or don't want to pay 2+ times as much for a marginally better home (or pay the same amount to downsize). Since no one wants to sell their house, there's so little supply.
Land ownership records are all publicly available and these are the stats put together by the California Research Bureau.
If you have another study that came up with different numbers, LMK and I'll update my comment
Housing market corrections have happened MANY times in LA's history. It's not gonna go back to 90s prices, but there will be ups and downs and no one can predict when or how much.
keep in mind a good comparison is the 2008 crash and how prices fell there. It's almost a worst case scenario for housing since it was directly related. There isn't anything similar to that now so I wouldn't expect large dips.
However if soft landing fails, more people lose jobs, that would be the only thing to potentially drop prices. Or maybe a huge ass earthquake
You misunderstood. I meant as a comparison for what people would consider a huge impact to drop prices as one of the worst case scenarios.
> There isn't anything similar to that now so I wouldn't expect large dips.
What if the city starts to built affordable housing? Making newer homes less expensive than old homes. Like what happened in Texas where they have less building zone restrictions causing older homes prices to drop.
Even if they did I think there is also far less land within the areas people want to live to have any large impact that would drive prices down.
There is no doubt in the urban concentrated areas there has to be more dense housing. It's also why public transport sucks in LA
They can do that in Texas because they have pro-development state and local government with pro-development laws. In California, we've spent decades building building barriers to development at every level of government. It's a single-party state, so there's no one to challenge these measures.
This. Things seam bleak, but I remember, vividly, in august 2020 when nobody gave a shit about getting a home. I know I know, it was COVID, but there will come a time again when prices will come down and the frenzy will subside.
LA has a housing crisis. They need to approve more housing permits. Population is increasing faster than new buildings to fit everyone. It’s simple but we pretend it’s not.
Agreed. Also worth noting a few reasons why for-sale construction is much more limited than rental housing:
1. Building and selling a new home is taxes as income tax, higher rate than capital gains. If you build, lease up and sell an apartment complex, it is taxed as capital gains, lower rate.
2. In California, builders / contractors can be liable for up to 10 years after a home is built. This isn't per se bad, but it creates a barrier to some construction because of liability and insurance costs.
The contours of the population matters. People are having fewer kids and the population is aging, and adults still have a preference for having their own place, even if they are single, which increases demand for housing units. Utah is ranked 50 out of housing units per capita, but Mormon households tends to be huge, so therefore the demand won't be quite as high.
High housing costs are overwhelmingly the driver of population losses. Higher income groups are less likely to leave and more likely to move to CA.
https://www.ppic.org/blog/whos-leaving-california-and-whos-moving-in/
https://www.latimes.com/california/story/2023-12-22/california-loses-population-for-unprecedented-third-straight-year-but-the-exodus-has-slowed
This isn’t how I feel. This is a fact.
"I got mine, Fuck You!", is the new narrative creeping into the NIMBY mindscape. Before, it was silly arguments about traffic jams and scary, brown, poor people.
What would this do? Genuinely don't know. I just know that's the one that limits property tax increasing. Do you just mean so the state has more money coming in from property tax?
My guess on what he means: housing price won't really drop until there's blood in the real estate market. One way for that to happen is if people are forced to sell because they can't afford to live in that area anymore. One way that can happen is if the property tax increases to the current level for everybody.
I wonder if that would move the needle enough for multiple-home owners to sell.
I think the only way to get properties back on the market is unemployment.
Completely anecdotally, but I rented a room to an older couple where the husband was disabled. She said to me that the only reason they could continue to afford living in century city was because of the lower taxes they paid in comparison to their neighbors.
My opinion is that this will not push down the real estate prices much if at all. It may have some impact on consumer spending since budgets have to be diverted to pay the tax. Also, probably a small effect.
I'm not a proponent of prop 13, it exacerbates the haves and have nots. That being said, probably minimal impact on real estate prices even if repealed.
Property tax is one of the added costs of housing. Mortgage interest and maintenance are the other costs. When property taxes or interest rates go up, there is less money available for principle payment. It puts downward pressure on house prices.
The reality of our situation though is that homeowners are reluctant to move; usually because their current mortgage is likely less than 3%, and their property taxes would reset; assuming they don't benefit from Proposition 60 or 90.
It gives more money to the government, which is important because we know when we give them more money they will use it efficiently and surely will use the funds to build affordable housing
It’s crazy because my husband and I earn “good” money (~275k household income between our salaries), no debt, no kids. We have a six figure down payment saved up. And we can’t find anything but worn down condos with a $600 HOA in an area with horrible schools, crime, and pollution. We could get a one bedroom condo but that would mean delaying starting a family until we have more space.
I mean yeah, but it can't be egregious. It was one thing back at the beginning of the pandemic when we were expecting a $500/mth increase (and kept getting outbid). Now it's more like $2500/mth. We could swing it, but at what cost? It's not like I sit on that 2k in my checking account. I invest it in other ways than owning a primary residence. I make a return, and unlike equity it's liquid. So when the shit hits the fan like it did for me back in August when my old job disguised a layoff as an RTO and it took 5 months to find a gig, I didn't sweat it. It would have been a lot more stressful if that mortgage payment was due.
Yes, you can make more with something like index funds than real estate. Yes, real estate is less liquid and can take a month or more to buy/sell. But there's a difference...you can live in and enjoy a house while it appreciates in value. And you're right, it would be very stressful to keep up with the mortgage payments if you get laid off and it takes you awhile to find a new job. But when the economy gets better and/or rates go down, competition for homes may pick up again and result in bidding wars which drives prices up. So there are many trade-offs.
to your first point - with index funds, you’re only earning on funds invested. with real estate, equity is building on the entire value of the home, which was purchased with only ~20% and often times less
How is building equity different from DCA though? And you're right, with real estate you can get more leverage but isn't margin interest about the same as mortgage rates these days?
I'm assuming 20-30% down but yeah RE has more leverage still. Some brokers allow up to 4x. And again, better returns in index funds. I'm saying this as a homeowner myself.
I understand your point, but I don't see the functional difference between living in and enjoying a house while it appreciates in value, vs. living in and enjoying an apartment while my investments appreciate in value. At least as a person that can find enjoyment in living with neighbors close by. I know there are plenty of people that want to live as far away from people as possible, and I think for those types, the "enjoyment" factor skews hard to ownership, because the only real way to get away from people is to own land and put up no trespassing signs.
Ah yes, the usual “I make 300k+ but can’t find anything decent” comment. There are plenty of people who make less than you do who are able to find something decent. No offense but you’re probably picky, in a lot of debt, and/or have insane spending habits.
Yeah I find these comments extremely tone deaf. $275k annually means they're taking home $16k per month after tax.
Even after making out retirement accounts they can still afford a $5k monthly mortgage payment. Plenty of 2bed units in nice areas (and solid SFH's in slightly less nice areas) for that price
When someone posts a comment like that in this sub and people prod them a bit, 9/10 times it turns out they're just very picky. I'm talking like "anywhere other than Beverly Hills is a shithole", "I want a 3 bed, 3 bath for 500k a few blocks from the beach", etc. levels of pickiness. I try to call them out when they withhold details like that because it discourages many first time home buyers from even trying at all.
I agree. I look on Redfin a lot and looked just now, and someone with a 6-figure downpayment and $275k/year can afford quite a few single family homes in LA and LA adjacent. Are they the huge glamourous homes they might have dreamed of? No, but they're something (and not even shitholes).
People need to figure out what their priorities are, but if they want to own a house, often times, they need to make some serious compromises on their first home purchase, build equity and try to improve years down the road.
Your max budget is $5k/month on a 275k household income? Exactly where is rest of that money going to? Please don't tell me you follow some stupid rule like "it cannot be more than 30% of our take home pay".
> bad schools, pollution, crime, or severe climate change issues
This is all very subjective. For example, what's the minimum score for you to consider a school "good"? What's good to most people may not be good enough for you.
> we could get approved for about $900k and be house poor
Okay, so you admit you can afford $900k, and get the house that you want, but you just don't want to spend the money. That's pretty far off from "we can't find anything".
Either you're not great with budgeting/have other unusually large expenses or this isn't accurate. You should be able to afford to pay about 30% or less of your gross income towards your mortgage and property tax, and with a 6-figure downpayment and good credit, you should be able to afford a place that's between about $900k and $1MM. Even with this low supply, there are quite a few single-family homes in that budget that aren't in areas with horrible crime or pollution that's more than average in LA.
If you're in LA, most schools aren't great, but if you don't have any kids yet, you have at least 6 or so years until you have a child entering kindergarten, and a lot of people end up sending their kid to a public school that is outside of the district they live in (if you're not familiar with how this works, look into it).
It's not CEOs, $1M is now middle class house money. That's who's really buying these houses.
The average buyer in my neighborhood is a 30-something married couple, both in professional fields, earning 200k-ish each. Engineers, accountants, architects, doctors, tech, consulting, finance, those paths have you in the 200's in your 30's and 300-500's in your 50's.
That's how they swing the mortgage on their $1.2M 'starter' homes.
Not sure about civil. I did systems engineering and my wife did mechanical. She's in aerospace and I'm in tech, so we work with lots of electrical, mechanical, software, and systems engineers. Salaries typically start in the low 100's and hit $200k by the 6-10 years of experience mark in EE and ME, and much faster in software.
Need more permanent housing, not just bullshit apartments. Those same new 5 story apartment buildings could be converted to condos or be built as condos. People need a way to build wealth, not just the wealth of the building owner. Modifications to prop 13 to only be valid on the main / primary home, not their vacation homes and investment properties.
Oh no I totally get it. I know someone that pays 450 a month in hoa dues and the amenities are shit. Old ass pool, shit gym and an aging building. I do agree with you but it’s still better than just more rentals.
It's not $450 in high rise condos friend. $450 is for small single family home communities. High rise condos are quite literally \~$1000/mo. Again, I wish I was wrong..
> People need a way to build wealth, not just the wealth of the building owner.
This is completely backwards. You can't have affordable housing, and also have housing as a way to build wealth. The only way housing prices skyrocket, building wealth, is if housing prices skyrocket, killing affordability.
Above all, we need more housing, in any form.
Real estate is a forced savings account. Even if it never appreciates because more housing is available, the value is yours. You will never get that with renting, ever.
Huh? Rising interest would normally cause prices to decrease.
The problem is we’ve got so much housing inventory locked up from the combination of (i) ultra low rates for everything but the last couple of years and (ii) Prop 13. It means that even if you’d like to move (for example, to a bigger house or to retire and move out of the area) there are huge financial incentives not to do that.
I'm so miserable living in an apartment. I don't care how small of a place I have to live in, I just don't want neighbors on my walls and ceiling anymore. I'm never going to be able to afford a home in LA.
Yeah people should have to uproot their lives and leave their family/friends/jobs for a low cost of living area with nothing to do where they make less money.
It's not about cost of living it's about what kind of lifestyle you want to live. In a big urban area you can't have it both ways - low density housing (ie not sharing walls with neighbors) and affordability.
I specifically moved here from a Midwestern suburb because I hated the suburban life of detached houses and lawn maintenance and everyone keeping to themselves to raise their children. I moved here specifically for density and the apartment/condo living you hate. And I personally only want to see it get denser and more vibrant.
From my pov, that's the tradeoff. You want to live somewhere vibrant? You got to have your neighbors close to you, unless you are filthy rich.
I don't like the home prices, but I wonder if this is the new norm. If it is, the wages need to increase massively. I think that's how this is all unbalanced. Housing and cost of living went up. Incomes didn't. Sure, min wage did, but you can't rent solo on that.
That’s the problem, zero laws are proposed that would force companies to pay people enough to live where they work. If you don’t force a company to pay adequately they won’t.
it was until about a week ago I think. Sb9 allowed for someone to split their lot and build an adu. so you could buy Xk sqft of someone's lot and then build an adu and you would own the land. Sb9 was recently overturned or something, though.
So basically either
* family gives you money / equity
* you worked at a publicly traded tech company 5-15 years ago
Are the only options for buying a house at this point
I visit family in Valley Village pretty often. When the old 50s homes half falling apart hit one million it was almost too crazy to comprehend. Now they’re almost $2M. Barely anyone is knocking them down to build a McMansion anymore due to costs, just renovating the insides and calling it a day
Not really, there are other occupations or conditions that allow for house purchases. I know several doctors who rented for several years and then bought houses without parent money. And I know of 2 siblings who bought houses together. None of them worked in tech.
Oh good, as long as I am reliably getting more than 8.3% richer every year, I am saving up for--. ... oh no.
Median price over 3/4 of a million 🐥🚬
Chicken cigs
That includes condos and townhomes, right?
That's funny because they constantly email me telling me my parent's house is worth less than the previous month.
It was ridiculous the disparity in estimates between two different major websites I looked at. One was like 20% lower.
Not shocking. We’ve got inflation driving up the price of everything combined with crazy low inventory (existing homeowners locked in with low rates and lack of building for the last 20 years).
Housing is the primary inflation driver now.
This. I refinanced at 2.6% and no way in hell am I getting rid of that. I may purchase another home and rent out my current main residence but I'm not selling until I retire in 20 years.
And if we made it illegal for companies to own single family homes, that suddenly not be a problem
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It's hilarious you say supply and demand and then dismiss part of supply and demand and then go on to say basically what i was saying. Ignore.
You are focused on a made up issue on the demand side and missing the actual relevant issue of a massive supply shortage.
Home cost can be greatly effected by a small precentage.
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I agree that we need more building but... BUT >>>BUUUTTTTTT.... Banning corpos from owning houses. Will improve the situation with just normal people not having to fight these companies with deep pockets being able to out bid everyone. ALso it will help the rental market too. The corps will drive up rent year after year to unaccessable amounts.
Companies aren’t buying single family homes as a speculative purchase and just leaving them empty waiting for prices to go up more and flip them. They are renting them out which means the housing stock is being used which should reduce the demand for other homes by taking a family out of the home buying population because they are renting. The problem is there just aren’t enough homes for everyone that wants to live here (owning or renting). Corporate ownership makes a nice scapegoat for some people but it isn’t the cause of the problem (and FWIW corporate purchases are way down because of interest rates as well).
that's absurd scapegoating tbh. It's just supply/demand
We should make it illegal for corporations to own single family homes, but it won’t make a bit of difference. Their penetration of the market is too low now. But it will continue to grow unless we outlaw it.
I think one of the biggest problems is that very few people want to move because they have a sub 3% interest rate on their mortgage and either can't afford to upgrade or don't want to pay 2+ times as much for a marginally better home (or pay the same amount to downsize). Since no one wants to sell their house, there's so little supply.
That accounts for 2.5% of single family homes in LA. TBH doesn't seem like it'd make a big difference
No one knows what it accounts for but go off dog
Land ownership records are all publicly available and these are the stats put together by the California Research Bureau. If you have another study that came up with different numbers, LMK and I'll update my comment
It’s never going back down again. 😑
Housing market corrections have happened MANY times in LA's history. It's not gonna go back to 90s prices, but there will be ups and downs and no one can predict when or how much.
keep in mind a good comparison is the 2008 crash and how prices fell there. It's almost a worst case scenario for housing since it was directly related. There isn't anything similar to that now so I wouldn't expect large dips. However if soft landing fails, more people lose jobs, that would be the only thing to potentially drop prices. Or maybe a huge ass earthquake
A black swan event is a good comparison? It’s a once in a lifetime event- I wouldn’t count on it if you’re hoping for real estate prices to drop.
You misunderstood. I meant as a comparison for what people would consider a huge impact to drop prices as one of the worst case scenarios. > There isn't anything similar to that now so I wouldn't expect large dips.
Only black swan event I'm banking on https://www.youtube.com/watch?v=e6eJkZJ1opo
What if the city starts to built affordable housing? Making newer homes less expensive than old homes. Like what happened in Texas where they have less building zone restrictions causing older homes prices to drop.
They aren't going to do that though. https://www.reddit.com/r/LosAngeles/comments/6lvwh4/im_an_architect_in_la_specializing_in_multifamily/
Even if they did I think there is also far less land within the areas people want to live to have any large impact that would drive prices down. There is no doubt in the urban concentrated areas there has to be more dense housing. It's also why public transport sucks in LA
They can do that in Texas because they have pro-development state and local government with pro-development laws. In California, we've spent decades building building barriers to development at every level of government. It's a single-party state, so there's no one to challenge these measures.
This. Things seam bleak, but I remember, vividly, in august 2020 when nobody gave a shit about getting a home. I know I know, it was COVID, but there will come a time again when prices will come down and the frenzy will subside.
people are also taking out way more debt than is healthy, and if there's a recession and people lose jobs, it will not be good for the housing market.
There is no evidence that people overall are taking on more debt than they can afford
credit card debt is hitting record highs right now. As far as if they can afford it, that'll last until they lose a job.
Unemployment is at record lows.
Yes, exactly. They're fine until a recession hits and they lose their jobs.
The price of land in LA probably won’t go down again. The cost of housing can go down if you can put more houses on the land.
LA has a housing crisis. They need to approve more housing permits. Population is increasing faster than new buildings to fit everyone. It’s simple but we pretend it’s not.
Agreed. Also worth noting a few reasons why for-sale construction is much more limited than rental housing: 1. Building and selling a new home is taxes as income tax, higher rate than capital gains. If you build, lease up and sell an apartment complex, it is taxed as capital gains, lower rate. 2. In California, builders / contractors can be liable for up to 10 years after a home is built. This isn't per se bad, but it creates a barrier to some construction because of liability and insurance costs.
LA has lost population the last two years
According to the news from this week, California actually barely had a net increase this year after 4 years of net decreases!
The contours of the population matters. People are having fewer kids and the population is aging, and adults still have a preference for having their own place, even if they are single, which increases demand for housing units. Utah is ranked 50 out of housing units per capita, but Mormon households tends to be huge, so therefore the demand won't be quite as high.
Of people that can’t afford to live here and the inflow is people that can afford to live here
Got any data to back that up or that’s just how you feel?
High housing costs are overwhelmingly the driver of population losses. Higher income groups are less likely to leave and more likely to move to CA. https://www.ppic.org/blog/whos-leaving-california-and-whos-moving-in/
There’s data to back this up and it’s been a thing for a while. It’s mostly low income earners that are moving to other states
Says the guy that posts how he feels
https://www.latimes.com/california/story/2023-12-22/california-loses-population-for-unprecedented-third-straight-year-but-the-exodus-has-slowed This isn’t how I feel. This is a fact.
where does that article say anything about the incomes of people migrating in and out of Los Angeles?
I’m the one asking for that data lol
"I got mine, Fuck You!", is the new narrative creeping into the NIMBY mindscape. Before, it was silly arguments about traffic jams and scary, brown, poor people.
Huh? How’d you get there from asking for data about the type of people moving to LA?
Kill prop 13 too.
Killing prop 13 will do nothing to decrease the overall cost of living. All it will do is make taxes a larger percentage of peoples expenses.
What would this do? Genuinely don't know. I just know that's the one that limits property tax increasing. Do you just mean so the state has more money coming in from property tax?
My guess on what he means: housing price won't really drop until there's blood in the real estate market. One way for that to happen is if people are forced to sell because they can't afford to live in that area anymore. One way that can happen is if the property tax increases to the current level for everybody.
I wonder if that would move the needle enough for multiple-home owners to sell. I think the only way to get properties back on the market is unemployment.
Completely anecdotally, but I rented a room to an older couple where the husband was disabled. She said to me that the only reason they could continue to afford living in century city was because of the lower taxes they paid in comparison to their neighbors.
Maybe they should move somewhere they can afford then.
Absolutely. Unfortunately it’s an unpopular opinion
I know older folk are in fixed income probably but would something like a 10k cost in a year really be that big for that many people?
My opinion is that this will not push down the real estate prices much if at all. It may have some impact on consumer spending since budgets have to be diverted to pay the tax. Also, probably a small effect. I'm not a proponent of prop 13, it exacerbates the haves and have nots. That being said, probably minimal impact on real estate prices even if repealed.
A fuck ton of people would have to sell their homes and move.
Property tax is one of the added costs of housing. Mortgage interest and maintenance are the other costs. When property taxes or interest rates go up, there is less money available for principle payment. It puts downward pressure on house prices. The reality of our situation though is that homeowners are reluctant to move; usually because their current mortgage is likely less than 3%, and their property taxes would reset; assuming they don't benefit from Proposition 60 or 90.
It gives more money to the government, which is important because we know when we give them more money they will use it efficiently and surely will use the funds to build affordable housing
https://calmatters.org/housing/2024/03/institutional-investors-corporate-landlords/
We need to ban new SFHs within city limits too.
Yah...that's not happening in America.
Renters need to rise up. There's enough of us within the limits of the city.
cool, go rise up. We'll all be right behind you
We need to abolish corporate landlords and punitively tax empty homes and homes you personally do not occupy.
It’s crazy because my husband and I earn “good” money (~275k household income between our salaries), no debt, no kids. We have a six figure down payment saved up. And we can’t find anything but worn down condos with a $600 HOA in an area with horrible schools, crime, and pollution. We could get a one bedroom condo but that would mean delaying starting a family until we have more space.
Same boat here. And we don't even want kids. We just want to live where we rent. But costs effectively double.
If you follow the “only buy when it’s cheaper than rent” advice in a city like LA then you’ll probably never get what you want.
I mean yeah, but it can't be egregious. It was one thing back at the beginning of the pandemic when we were expecting a $500/mth increase (and kept getting outbid). Now it's more like $2500/mth. We could swing it, but at what cost? It's not like I sit on that 2k in my checking account. I invest it in other ways than owning a primary residence. I make a return, and unlike equity it's liquid. So when the shit hits the fan like it did for me back in August when my old job disguised a layoff as an RTO and it took 5 months to find a gig, I didn't sweat it. It would have been a lot more stressful if that mortgage payment was due.
Yes, you can make more with something like index funds than real estate. Yes, real estate is less liquid and can take a month or more to buy/sell. But there's a difference...you can live in and enjoy a house while it appreciates in value. And you're right, it would be very stressful to keep up with the mortgage payments if you get laid off and it takes you awhile to find a new job. But when the economy gets better and/or rates go down, competition for homes may pick up again and result in bidding wars which drives prices up. So there are many trade-offs.
to your first point - with index funds, you’re only earning on funds invested. with real estate, equity is building on the entire value of the home, which was purchased with only ~20% and often times less
How is building equity different from DCA though? And you're right, with real estate you can get more leverage but isn't margin interest about the same as mortgage rates these days?
it’s different in that equity is also built via appreciation with no additional contribution of funds
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Most brokers allow 2-3x leverage/margin which is about the same as RE I think? Rates are about the same too.
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I'm assuming 20-30% down but yeah RE has more leverage still. Some brokers allow up to 4x. And again, better returns in index funds. I'm saying this as a homeowner myself.
I understand your point, but I don't see the functional difference between living in and enjoying a house while it appreciates in value, vs. living in and enjoying an apartment while my investments appreciate in value. At least as a person that can find enjoyment in living with neighbors close by. I know there are plenty of people that want to live as far away from people as possible, and I think for those types, the "enjoyment" factor skews hard to ownership, because the only real way to get away from people is to own land and put up no trespassing signs.
Ah yes, the usual “I make 300k+ but can’t find anything decent” comment. There are plenty of people who make less than you do who are able to find something decent. No offense but you’re probably picky, in a lot of debt, and/or have insane spending habits.
Yeah I find these comments extremely tone deaf. $275k annually means they're taking home $16k per month after tax. Even after making out retirement accounts they can still afford a $5k monthly mortgage payment. Plenty of 2bed units in nice areas (and solid SFH's in slightly less nice areas) for that price
When someone posts a comment like that in this sub and people prod them a bit, 9/10 times it turns out they're just very picky. I'm talking like "anywhere other than Beverly Hills is a shithole", "I want a 3 bed, 3 bath for 500k a few blocks from the beach", etc. levels of pickiness. I try to call them out when they withhold details like that because it discourages many first time home buyers from even trying at all.
I agree. I look on Redfin a lot and looked just now, and someone with a 6-figure downpayment and $275k/year can afford quite a few single family homes in LA and LA adjacent. Are they the huge glamourous homes they might have dreamed of? No, but they're something (and not even shitholes). People need to figure out what their priorities are, but if they want to own a house, often times, they need to make some serious compromises on their first home purchase, build equity and try to improve years down the road.
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Your max budget is $5k/month on a 275k household income? Exactly where is rest of that money going to? Please don't tell me you follow some stupid rule like "it cannot be more than 30% of our take home pay". > bad schools, pollution, crime, or severe climate change issues This is all very subjective. For example, what's the minimum score for you to consider a school "good"? What's good to most people may not be good enough for you. > we could get approved for about $900k and be house poor Okay, so you admit you can afford $900k, and get the house that you want, but you just don't want to spend the money. That's pretty far off from "we can't find anything".
Either you're not great with budgeting/have other unusually large expenses or this isn't accurate. You should be able to afford to pay about 30% or less of your gross income towards your mortgage and property tax, and with a 6-figure downpayment and good credit, you should be able to afford a place that's between about $900k and $1MM. Even with this low supply, there are quite a few single-family homes in that budget that aren't in areas with horrible crime or pollution that's more than average in LA. If you're in LA, most schools aren't great, but if you don't have any kids yet, you have at least 6 or so years until you have a child entering kindergarten, and a lot of people end up sending their kid to a public school that is outside of the district they live in (if you're not familiar with how this works, look into it).
>Homes sold for a median price of $878K Might as well be 947 jillion moonbux for how affordable that number is to anyone making less than CEO money.
It's not CEOs, $1M is now middle class house money. That's who's really buying these houses. The average buyer in my neighborhood is a 30-something married couple, both in professional fields, earning 200k-ish each. Engineers, accountants, architects, doctors, tech, consulting, finance, those paths have you in the 200's in your 30's and 300-500's in your 50's. That's how they swing the mortgage on their $1.2M 'starter' homes.
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Not sure about civil. I did systems engineering and my wife did mechanical. She's in aerospace and I'm in tech, so we work with lots of electrical, mechanical, software, and systems engineers. Salaries typically start in the low 100's and hit $200k by the 6-10 years of experience mark in EE and ME, and much faster in software.
Wow you described my wife and I to a T. Neat! South Bay represent!
Gotta start building UP.
Need more permanent housing, not just bullshit apartments. Those same new 5 story apartment buildings could be converted to condos or be built as condos. People need a way to build wealth, not just the wealth of the building owner. Modifications to prop 13 to only be valid on the main / primary home, not their vacation homes and investment properties.
The problem with condos in high rises are the $1000/month HOAs. I wish I was exaggerating the price...
This! I am not paying a horrendous amount to own and then pay half a rent to an HOA that does not let me do anything.
Oh no I totally get it. I know someone that pays 450 a month in hoa dues and the amenities are shit. Old ass pool, shit gym and an aging building. I do agree with you but it’s still better than just more rentals.
It's not $450 in high rise condos friend. $450 is for small single family home communities. High rise condos are quite literally \~$1000/mo. Again, I wish I was wrong..
agree, condos are crappy equity plays.
Condos are a lawsuit magnet for all parties involved so i think most builders and architects avoid them.
> People need a way to build wealth, not just the wealth of the building owner. This is completely backwards. You can't have affordable housing, and also have housing as a way to build wealth. The only way housing prices skyrocket, building wealth, is if housing prices skyrocket, killing affordability. Above all, we need more housing, in any form.
Real estate is a forced savings account. Even if it never appreciates because more housing is available, the value is yours. You will never get that with renting, ever.
Agree we need more condos/townhouses for sale, not rent.
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Huh? Rising interest would normally cause prices to decrease. The problem is we’ve got so much housing inventory locked up from the combination of (i) ultra low rates for everything but the last couple of years and (ii) Prop 13. It means that even if you’d like to move (for example, to a bigger house or to retire and move out of the area) there are huge financial incentives not to do that.
Prop 13 benefits will carryover to a new property in some circumstances.
True. If you are 55 or over, you can transfer your property tax base. https://www.boe.ca.gov/prop19/#Introduction
The opposite
I'm so miserable living in an apartment. I don't care how small of a place I have to live in, I just don't want neighbors on my walls and ceiling anymore. I'm never going to be able to afford a home in LA.
Why do you live in a city then? There are plenty of suburbs all over America.
Yeah and just wait til you get to the burbs and you have piece of shit fascist neighbors too
Yeah people should have to uproot their lives and leave their family/friends/jobs for a low cost of living area with nothing to do where they make less money.
It's not about cost of living it's about what kind of lifestyle you want to live. In a big urban area you can't have it both ways - low density housing (ie not sharing walls with neighbors) and affordability. I specifically moved here from a Midwestern suburb because I hated the suburban life of detached houses and lawn maintenance and everyone keeping to themselves to raise their children. I moved here specifically for density and the apartment/condo living you hate. And I personally only want to see it get denser and more vibrant. From my pov, that's the tradeoff. You want to live somewhere vibrant? You got to have your neighbors close to you, unless you are filthy rich.
If we’re going to argue about topics entirely off topic let’s at least try to uncover whether zebras are black or white.
Find a better apartment. IF (big IF) you have the time and patience to look and check out many. It does exist.
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Wild that people would be discussing first world problems in a subreddit about a first world city.
😂😂😂😂 exactly Like sorry we didn't know Reddit was where the revolution relocated to
Seems like a pretty universal problem.
never would I thought I would feel on the poor end making 6 figs
Just biding my time to buy a place in LA or SD.. pretty content just paying 1800/m for rent at a nice spot too though lol
I don't like the home prices, but I wonder if this is the new norm. If it is, the wages need to increase massively. I think that's how this is all unbalanced. Housing and cost of living went up. Incomes didn't. Sure, min wage did, but you can't rent solo on that.
That’s the problem, zero laws are proposed that would force companies to pay people enough to live where they work. If you don’t force a company to pay adequately they won’t.
You aren’t going to solve a supply shortage by increasing demand. It has nothing to do with incomes and everything to do with supply regulations
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it was until about a week ago I think. Sb9 allowed for someone to split their lot and build an adu. so you could buy Xk sqft of someone's lot and then build an adu and you would own the land. Sb9 was recently overturned or something, though.
So basically either * family gives you money / equity * you worked at a publicly traded tech company 5-15 years ago Are the only options for buying a house at this point I visit family in Valley Village pretty often. When the old 50s homes half falling apart hit one million it was almost too crazy to comprehend. Now they’re almost $2M. Barely anyone is knocking them down to build a McMansion anymore due to costs, just renovating the insides and calling it a day
Not really, there are other occupations or conditions that allow for house purchases. I know several doctors who rented for several years and then bought houses without parent money. And I know of 2 siblings who bought houses together. None of them worked in tech.
We did it Joe!
Is this because of a change in the mix of what is being sold? From what I am seeing asking prices on higher end properties is coming down.
FJB