How do people afford to buy a house here? (Compton: leases, broker)

[Mr_Geek]

Here's how it works in LA.

There's a large number of people who have lived in their homes (or had their homes in the family) for a long time. Back before prices were what you see today. So they continue to live in their homes probably just paying the yearly taxes (and many can barely afford that I'd imagine).

Some homes are bought by middle class families who will barely scrape by making the payments each month. Probably have a high payment to income ratio on a monthly basis.

Then there's the rich. They own homes and live in them or buy homes to rent out to others as investments. They end up renting many times to a family of 8-12 (unknowingly to the owner many times) and splitting $3,000 or whatever 8+ ways.

Then there's the rest who rent and cram 8-12 in apartments condos.

[Ultrarunner]

Originally Posted by jtamay3

Well if you have kids or plan on having kids, one doesn't really want to buy knowing they are going to move out and buy in another area and continue on until they get into a good area with a good school district. It's not like that almost anywhere else in the US(nowhere I can think of), why is it like that here?

Parents seem to always shop school districts... my friends in Washington and Texas do.

How about buying into a not so good area and turning it around?

I know politically... it is called gentrification and looked down upon.

I work with a Doctor that lived in a 1.5 million dollar home they absolutely loved... then the kids came along so they sold and bought a 2.1 million dollar home 30 minutes away just for the schools...

Funny thing is all their new neighbors send their kids to a 40 to 50k a year private school and this is what they ended up doing... AND the private school is closer to the home they sold than the one they bought.

[ashpelham]

I'd be interested to see how a worldwide (read: China) crash in economies will impact the ever-rising prices of homes, and those cash payers looking to park money someplace...

[jtamay3]

Originally Posted by jm1982

I know that many countries do this. I believe it is this way in Mexico or at least was in the past..Several other countries to this in an attempt to keep prices more in line with local wages...and "give the people/voters what they want"..but on the other side if you already bought property and lived there a while and want to sell..you don't want to limit the buyers of your house or sell for a low price..you want to sell for the highest price.

Personally I don't like these kinds of laws or policies to have a market just be for 'locals'

Also what are you going to consider a local? Does someone have to be born here in order to buy property or can they just be 'locals' for a day,week or month?

Do they have to be born right in that city or is the state or country ok?

It can get pretty complicated.
Also in any market there will still be areas where foreign buyers aren't buying ....or aren't buying heavily. All real estate is local.

Also what would you do about the people that already bought property but are foreign buyers? Would they be forced to sell their property?

People who already bought who are foreign buyers would be forced to either live here or sell the property over the course of a 1-2 year span. I would say, let them transfer it, but then that would be a loophole which will still allow foreign buyers via surrogate. They also have to prove they are here for 7 months or more.

I would consider locals as anyone in the U.S. for more than 4 years. Kind of like how local colleges define in-state tuition vs out of state. That would detract a foreign buyer to simply send someone here and buy up the land that way.

As far as the local buyers who want to sell their property, I'd have to say tough. I mean, it's the only reasonable way I can say this expensive housing issue can be corrected unless anyone else has better ideas. Preference should always be for those who live there and need to live there. Not some flipper who has no intentions of even contributing to the land they do business in.

There's a reason why houses in Rosarito on the beach can be had for $55,000 when you can't even find a house in Watts or Compton for double that.

[jtamay3]

Originally Posted by ashpelham

I'd be interested to see how a worldwide (read: China) crash in economies will impact the ever-rising prices of homes, and those cash payers looking to park money someplace...

They're be even more likely to invest in housing over here which is bad news for us.

Originally Posted by Ultrarunner

Parents seem to always shop school districts... my friends in Washington and Texas do.

How about buying into a not so good area and turning it around?

I know politically... it is called gentrification and looked down upon.

I work with a Doctor that lived in a 1.5 million dollar home they absolutely loved... then the kids came along so they sold and bought a 2.1 million dollar home 30 minutes away just for the schools...

Funny thing is all their new neighbors send their kids to a 40 to 50k a year private school and this is what they ended up doing... AND the private school is closer to the home they sold than the one they bought.

In a perfect world, I can do that, but I also have to worry about safety for my children and wife. Plus, I would still have to wait for the neighborhood to start gentrifying if it ever happens. You're betting too much at that point. If it was me, by myself, yes. If I have a family, I can't take that risk. And trust me, there's been many times where I thought about just buying a property I could afford to live in in Inglewood, Carson, Compton, Lynwood, Watts. It doesn't make sense for my family though.

Originally Posted by Mr_Geek

Here's how it works in LA.

There's a large number of people who have lived in their homes (or had their homes in the family) for a long time. Back before prices were what you see today. So they continue to live in their homes probably just paying the yearly taxes (and many can barely afford that I'd imagine).

Some homes are bought by middle class families who will barely scrape by making the payments each month. Probably have a high payment to income ratio on a monthly basis.

Then there's the rich. They own homes and live in them or buy homes to rent out to others as investments. They end up renting many times to a family of 8-12 (unknowingly to the owner many times) and splitting $3,000 or whatever 8+ ways.

Then there's the rest who rent and cram 8-12 in apartments condos.

And I'm saying, you cut out the rich that is simply jacking up the price for everyone else by not even living here. That alone causes the prices to regulate and get a little more realistic. I'm not saying to expect to pay $100,000 for beach front property, but you shouldn't be paying $750,000 for an ok 3/2 house in Mid-City or Culver.

[CA4Now]

Originally Posted by jtamay3

Well if you have kids or plan on having kids, one doesn't really want to buy knowing they are going to move out and buy in another area and continue on until they get into a good area with a good school district. It's not like that almost anywhere else in the US(nowhere I can think of), why is it like that here?

It isn't like that here. You start out in the not so great school district, then you move out....then you move up within that school district. People in So CA have been doing this for decades.

But we all started out in tiny houses or condos (evern with a baby). As Ultrarunner said, today many people just won't settle for that.

[jtamay3]

Originally Posted by CA4Now

It isn't like that here. You start out in the not so great school district, then you move out....then you move up within that school district. People in So CA have been doing this for decades.

But we all started out in tiny houses or condos (evern with a baby). As Ultrarunner said, today many people just won't settle for that.

But that's the thing. People can't afford to live in the areas with good school districts if they want to buy a house. Not without buying and selling every 5 years until they've moved as far up as they wanted to.

[Ultrarunner]

A person can almost always rent in a better district and this is exactly what one of my friends did... they had a nice home in a not so good district... they decided to rent in the top district and also rented their home... it turned out better than imagined.

Another friend got a job as an apartment manager in a good district and was set.

A family member has his office in a good school district and was able to get a waiver based on his business address.

There is a recent case of a housekeeper in a top district that was able to have her daughter attend in that district... it was not easy and the media got involved... in the end it did happen.

Sometimes one needs to think outside the box.

[iama30something]

Originally Posted by jtamay3

There's a reason why houses in Rosarito on the beach can be had for $55,000 when you can't even find a house in Watts or Compton for double that.

I'd love to buy one of those houses on the beach for $55k. Where can I get one?

[HyperionGap]

Originally Posted by iama30something

I'd love to buy one of those houses on the beach for $55k. Where can I get one?

Rosarito.