How do people afford to buy a house here? (Fontana: sale, 2013)

[CA4Now]

Originally Posted by iama30something

RANT: How on Earth do people actually afford to buy here?

Like everyone else: they start small and work up. That doesn't seem to be an option for you if you don't want to live in a condo and your idea of a starter home is in Topanga Cyn.

[Chowhound]

The average person can't afford a house in those areas. The only way is if you bought way way back in the day, or your parents bought a home in the area a hundred yrs ago and have it paid off and they pass and will it over to you... I have a SIL that is in a similar situation, her dad is 90 and his house is paid off and probably worth upwards of 650k or more, free and clear... they could sell that and be sound as a pound.

if you're pulling down 85 or 90k a year and have a big down, you're still SOL... as while that sounds good and it is good stuff, in LA it's chicken feed if you want to be in the west side area.

That's why I'm leaving this area in a few yrs, I've bought a condo about 15 yrs ago and have a little bit of equity in it and I'm gonna sell in a few yrs and probably can clear enough to buy outright in a lot of other places.

I love LA, born and bred here, but the cold reality it that this isn't the only place to live there are plenty of other places that offer a lot of things and the home prices are reasonable.

House rich, cash poor.

That's how a lot of people here are......

[MordinSolus]

Originally Posted by Mr_Geek

That math is way off unless they have some balloon flex rate mortgage. Mortgage only at todays rates would be at least 3k I think and that doesn't include insurance, pmi, taxes etc...

30 year fixed rate iirc. I'm not sure on the exacts. I bought my house all cash and it was my first home purchase so I'm not an expert on the details of mortgages and financing and all that.

[StreetLegal]

Originally Posted by iama30something

How on Earth do people actually afford to buy here?

Where are you from OP?

Yes, you are correct that the current rent/home price levels in LA are just nuts. True, the place was never cheap but a recent study by the Anderson School at UCLA showed that LA's home prices increased the MOST of any metro area since 2000.

The home price increases over the 14 year period from 2000 to 2014:

Los Angeles: 121%
San Diego: 105%
Wash, DC: 101%
San Fran: 89%
NYC: 73%

http://la.curbed.com/archives/2014/1...t_14_years.php

Obviously, NYC and SF were growing off already very high bases. But LA has really jumped up over the last decade-and-a-half. Making it a very, very tough place to make it without substantial wealth, or having a home/real estate passed down to you, etc. The UCLA study also pointed out that LA is chronically under supplied with new housing units, even when compared its peer cities.

The inherited home from a 2nd or 3rd generation California family is something I have seen friends or co-workers benefit from. One former co-worker at the ripe age of 28 was handed the keys to a small but charming 2 bedroom single family house in West LA that his grandparents had owned since the 1940's. He was given it free and clear. Would be nice to be in that position.....

I grew up here and while I own comfortably, I have moments when I think about cashing in and moving somewhere like Miami where you get more bang for your buck.

[Mike121]

The old rule of thumb was that you buy a house 3x what you make. With low interest rates, you can probably stretch to 3.5x.

So, according to realtor.com, there are about 9,000 properties in LA County for sale for under $350k, of which 1,400 are in the City of LA. Those are the houses you can afford. I'm sure that most of them will be undesirable by some criterion: distance, neighborhood, dilapidation. If none of them are to your liking, then perhaps LA County isn't going to be a place where you can buy according to the old rules and strategies.

If none of them are to your liking, you must move to the new rules and strategies: multiple families in a home, multi-family homes, renting out rooms, more risky financial instruments, or other such things.

[ColdAilment]

Originally Posted by iama30something

RANT: I'm 31 and frugal. I've been saving since I was in high school and have a sizable amount saved for a down payment on a house. I also bring home a salary close to 6-figures. I have no kids and I'm not married.

...and I STILL can't afford a house within an hour of my office! I work in Santa Monica and I know the Westside isn't cheap. I'm not looking to live on the ocean by any means, but I can't even afford a house in Culver City, Mar Vista, West LA, Playa Del Ray, El Segundo... no where! I'm really looking for a house and not a condo...if I wanted a apartment with a HOA fee, I'd just rent (which is what I have been doing).

The best deal I've found was up to Topanga Canyon, for a nice 2 bed / 2ba, 1000 sq ft for $699k. That's a downpayment of $150k + a mortgage of $3600/month. Insane.

How on Earth do people actually afford to buy here?

That's why I have no interest in the west coast. $699k can buy you a nice 4,500 square foot house here with a big yard. Leave the Chicagoland area and 699k can buy you a McMansion with private gates, sprinkler system, and even a pool.

I've never understood the craze of California. It's a land grab nightmare, the prices of land and houses there do not justify the desirability of the area. Give me harsh winters where my dollar can actually purchase a decent home, I'm okay with that.

[genjy]

Originally Posted by ColdAilment

That's why I have no interest in the west coast. $699k can buy you a nice 4,500 square foot house here with a big yard. Leave the Chicagoland area and 699k can buy you a McMansion with private gates, sprinkler system, and even a pool.

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.

[BayAreaHillbilly]

Originally Posted by goldenglory18

...and this my friends, is how the Rich get richer......

Until the market tanks.

I once dated the daughter of a seemingly wealthy immigrant who had all these residential and commercial properties, that he'd used leverage to get into. Leverage ... listen to the real estate and investment shows on main stream radio and they all tout it. Of course, most of the hosts are mortgage brokers and realtors, follow the money ... I digress.

In any case, when the early 00s crash hit he had to BK some of the businesses associated with specific commercial property tranches. Then when '08 hit is was over. Total BK of his entire estate.

[kcimos]

If none of them are to your liking, you must move to the new rules and strategies: multiple families in a home, multi-family homes, renting out rooms, more risky financial instruments, or other such things.

Why? why should this be an acceptable way for society to function? Why should anyone find it normal that someone with an income in the top 15% should not be able to live comfortably. Do we really want it set up so that in order to not be homeless one needs a masters degree to get a $40,000/yr job & live in a shack with 10 other "losers", and the only way to have a nice house is to "earn" great wealth by "working hard" shuffling stocks around?

the situation is insane & something needs to change. Having an attitude that "noone has the right to live anywhere" (AKA only the rich should live (comfortably)) is really not doing anyone any good.

[MordinSolus]

Originally Posted by ColdAilment

That's why I have no interest in the west coast. $699k can buy you a nice 4,500 square foot house here with a big yard. Leave the Chicagoland area and 699k can buy you a McMansion with private gates, sprinkler system, and even a pool.

I've never understood the craze of California. It's a land grab nightmare, the prices of land and houses there do not justify the desirability of the area. Give me harsh winters where my dollar can actually purchase a decent home, I'm okay with that.

Chicago is also the murder capital of America. And it's not like Spring and Fall are particularly nice in Chicago. Chicago is nice 4 months out of the year, but in the middle of those 4 months is the 4th of July weekend, which should probably be renamed "Devil's Night" in Chicago.