How do people afford to buy a house here? (Los Angeles: sales, lofts)

[Texamichiforniasota]

Originally Posted by iama30something

I didn't believe this until I stumbled across this article: Where to put your cash? A house or a stock.

Makes me wonder why the majority of wealthy own their home instead of rent and invest that money in something else?

The other number you need to factor in is rent increases, as owning a home is basically a hedge against rent increases. If your stock portfolio went up 100% over 15 years, but your rent increased by 200% over the same time frame, you are not necessarily in a better financial situation. Your mortgage payment, on the other hand, is the same as it ever was, except homeowners insurance will have gone up and property taxes will have gone up 2% a year.

[nyctransplant27]

Originally Posted by radiolibre99

How on earth do people afford anything here is what I want to know? The home prices frustrate me but so does rent, the taxes, various fees etc just to live a normal life. I know there's a premium to live in LA but sometimes it gets ridiculous.

I do wonder what people do for a living to afford those homes above 500k.

Lawyers, physicians, tech workers, plastic surgeons, bankers, entrepreneurs, producers, actors, agents, etc.

[StreetLegal]

Originally Posted by Mr. Zero

Also, consider the markets where the wealthy are concentrated: cities like New York, Los Angeles and San Francisco. I would imagine the calculus is different in those areas, particularly when you factor in high rental prices and the expected appreciation of property values.

Additionally, financial factors including mortgage interest deductions and lower interest rates probably tilt the balance even more for higher income households with strong credit.

Finally, I think a big reason why more people would probably prefer to own is for the autonomy and control. You can do whatever you want with your own house and your future housing costs are much more predictable.

Also, regardless of the state of the housing market you can LIVE in a house where as a stock has no such utility.

[thelopez2]

Originally Posted by iama30something

Makes me wonder why the majority of wealthy own their home instead of rent and invest that money in something else?

To borrow at a lower cost than the returns on the markets.

[V8 Vega]

The way you buy a house here is to buy a small maybe fixer upper in a low house price area and there are plenty of low house price areas in the valley and all over. Live in it 5 years or so and then buy a bigger better house in a better neighborhood, and maybe do that again later.
You don't start out with your dream house when your young unless your unusally rich.

[Beardown91737]

Originally Posted by gentlearts

I was just watching HGTV and a couple from Burbank were shopping for a house. I am speechless. They are looking at total dumps about as big as the average American garage, for over half a million $$. Why don't the California people just rise up and revolt? Maybe they should just secede?

Not a federally caused problem. California policies are what keeps the housing market tight.

Originally Posted by StreetLegal

Definitely not the lowest. The homeownership rate from the US Census:

NYC: 31%
San Fran. County: 36%
LA County: 46%

Los Angeles County QuickFacts from the US Census Bureau

You can't compare those. LA is 40% of LA County. Frisco is 100% of SF County. NYC spans 5 counties. In general, suburban areas would inflate the % of homeowners.

Home Ownership in counties with cities over 1M. (same source)
San Diego County is 53.8% very expensive housing there
Cook County, IL 58.3%. Chicago's population is over half of that.
Dallas County, TX. 52.5%
Harris County, TX 56.5%
Bexar County, TX 59.7%
Maricopa County, AZ 62.5%
Santa Clara County, CA 57.5%

Originally Posted by BeatAngMoh

That is simply not true. I've seen plenty of immigrants (Latinos and East Asians) overcrowd a very modest house they bought in a not so desirable area then later graduate into a very nice house in suburbia. It all comes down to how hard you work and save. One of the problems is Caucasians don't see this as a path. They wont live in a place like South-Central or Koreatown as its not the Westside even if it would give them a start in owning their dream home in the future. I suppose it comes with the fear of living among minorities.

Whites and Blacks agree on this: One person per bedroom, not one family per bedroom.

[CA4Now]

Originally Posted by Beardown91737

California policies are what keeps the housing market tight.

How so?

[ashpelham]

Originally Posted by genjy

You can pretty much do that here too, even within Los Angeles County (Santa Clarita and Antelop Valley areas come to mind). The Inland Empire definitely has relatively inexpensive big homes as well.

There's no need to brave crazy-cold weather and snow just to afford a big home.

Thank you for providing a little sanity to an otherwise sad and depressing, though truthful, thread.

When we decide to make the big cross-country move, I already know that I wish to maintain the quality of life I have here in Alabama. I know that I will live a distance from the "attractions" but I won't have to work 2 jobs to afford it. I can hop in my car, and mix and mingle with all the pretty people I want to, and then leave it all behind for a modest lifestyle, albeit probably a good distance away.

I'll be successful because I don't need to keep up with The Joneses (one of the coolest movies, and a good friend of mine had a substantial role in).

[majoun]

Originally Posted by CA4Now

How so?

Zoning, Prop 13, the Coastal Commission, environmental regulations, bureaucracy, etc.

[CAMN2015]

Originally Posted by BRinSM

This is not a new issue to LA nor is it exclusive to LA. But you have some options:

1. get married to another person with a similar income
2. look in the valley
3. look in fringe areas like inglewood or hawthorne
.

THIS IS EXACTLY "exclusive" to LA. Housing prices are insane here. Haven't you heard the joke? In California, people who make $350,000 can't afford to buy a house.

Move to Minneapolis: you can get a nice house for $250-350k with a giant yard & good schools.

Move to Santa Clarita/Valencia & get an old 2 BR house for $450-$500k in Valencia & commute to the West Side (5 to the 405). There's tons of brand new houses & townhomes going in up here in the $600k range.

Hawthorne & Inglewood are pricey & parts of it are in the hood.

Good luck!