How soon until the LA rental market hits SF/NYC level? (Los Angeles: real estate, 2015)

[SandyCo]

Everything is cyclical, and just like in 2007, housing/rental prices are through the roof, far outpacing incomes. We're in another bubble again, and sooner or later that bubble is going to burst. Until the bubble bursts I doubt things will get as bad here in L.A. On the other hand if you look at median income and compare it to housing costs, L.A. is the most unaffordable area in the country. I'm sure that's because San Francisco has a lot of high paid tech jobs that skew their numbers, but it's still worth looking at.

I find it sobering that I'm doing okay now on my base salary (calculating one third of my salary spent on rent), but in another year or two that probably won't be the case. My rent is rising 5% per year, and my salary increases are 1-2% per year. I'm not sure what the answer is, especially because I'm now paying $1,510 for a 2-bedroom. Most comparable apartments are $2,000 - $2,200 in this area, which means that even if I tried to downsize to a 1-bedroom, I'd still be paying $1,700 - $1,800! Slim pickings out there, too. I have some money saved, and my bonuses are good enough that I'm not worried too much, but it still bothers me.

[ryanms3030]

Originally Posted by SandyCo

Everything is cyclical, and just like in 2007, housing/rental prices are through the roof, far outpacing incomes. We're in another bubble again, and sooner or later that bubble is going to burst. Until the bubble bursts I doubt things will get as bad here in L.A. On the other hand if you look at median income and compare it to housing costs, L.A. is the most unaffordable area in the country. I'm sure that's because San Francisco has a lot of high paid tech jobs that skew their numbers, but it's still worth looking at.

I find it sobering that I'm doing okay now on my base salary (calculating one third of my salary spent on rent), but in another year or two that probably won't be the case. My rent is rising 5% per year, and my salary increases are 1-2% per year. I'm not sure what the answer is, especially because I'm now paying $1,510 for a 2-bedroom. Most comparable apartments are $2,000 - $2,200 in this area, which means that even if I tried to downsize to a 1-bedroom, I'd still be paying $1,700 - $1,800! Slim pickings out there, too. I have some money saved, and my bonuses are good enough that I'm not worried too much, but it still bothers me.

Salary is not keeping up with COL here. I make $80k, I interviewed for a job in SF and they were offering $120-150k for essentially the same job I do now. Of course it is all relative because $120k to there probably puts me in the same lifestyle as $80k here. But honestly I need $100k right now to maintain the same lifestyle I had here two years ago. It is what it is. I can start looking for another job locally because that's the only way to get a 20% raise, I can buy a crappy condo and at least cap my home expenses or I can leave. My family and I don't really care about the things LA has to offer that no place else can and we're starting to care about good public schools which LA doesn't seem to offer so we're ready to move on.

[Heath V]

Those rents are ridiculous, you could have a custom home in Phoenix for that price per month and you'd actually own it, not rent. Unreal..

[ryanms3030]

Originally Posted by Heath V

Those rents are ridiculous, you could have a custom home in Phoenix for that price per month and you'd actually own it, not rent. Unreal..

I actually work with a guy that commutes from Phoenix as crazy as it sounds. He has a house in Phoenix, his family lives there and hes there 3 days per week and flys here to work 4 days and rents a room here. I doubt he makes much more than me and even with weekly flights and renting a room hes still living cheaper than having a place for his wife and kids in LA

[MordinSolus]

Originally Posted by Heath V

Those rents are ridiculous, you could have a custom home in Phoenix for that price per month and you'd actually own it, not rent. Unreal..

But you would be in Phoenix.

[seain dublin]

Originally Posted by Heath V

Those rents are ridiculous, you could have a custom home in Phoenix for that price per month and you'd actually own it, not rent. Unreal..

And you better like that house, as you won't want to leave it more than half the year. I have done the run from the A/C house to the A/C car to the A/C store, it gets real old when it goes on for months and months. Two or three months of intense heat, OK, when it goes to six months or more, forget it.

Originally Posted by ryanms3030

I actually work with a guy that commutes from Phoenix as crazy as it sounds. He has a house in Phoenix, his family lives there and hes there 3 days per week and flys here to work 4 days and rents a room here. I doubt he makes much more than me and even with weekly flights and renting a room hes still living cheaper than having a place for his wife and kids in LA

I highly doubt that. He must be spending a couple of hundred dollars every week to fly back to Phoenix, times that by four every month. Than you have the room rental. I bet if he actually sat down and crunched the numbers he would find he is further behind doing it this way. In addition to the strain on the family.

He probably has a big casa in Phoenix, and they would have to settle for less house in LA or even rent(but the family would be together), but I doubt he is saving money, he probably never even sat down and looked at the big picture. How could he? He doesn't have the time to sit down and crunch numbers. What a horrible way to live.

[NyWriterdude]

Originally Posted by JohnG72

Land/space is the issue. NY overall is very confined and it's not like you can drive into Manhattan from 15 miles out. SF Penninsula is even more so and most of the areas reached by public transit finished building out around 14-15 years ago. Also both are super dense whereas LA has a TON of ability to build upward.

Anyway the rental price gains due to the west side have about reached their limits. Neighborhoods in South Bay, Long Beach, east SGV, and Downey/Whittier area have not seen the crazy price escalation the Westside and south SFV have reached.

BTW, your landlord is unnecessarily greedy and I'd move if I were you.

People can and do drive in from 15 miles away in NYC. The biggest limit is parking. Since NYC is dense, as you say, you will be paying a lot of money to park if you insist on driving in, UNLESS you get free parking at the job (teachers, doctors, nurses, firemen, police).

In terms of whether LA will get NYC/SF expensive?

I'd say it currently isn't cheap, and it's hard to do a full comparasion.

Parts of NYC like Staten Island and the Bronx are not expensive at all. I live in Upper Manhattan, which is not that expensive. I'm a grad student paying $650 for a room, which is cheaper than the rooms my friends in LA are renting. I'd been scoping out different parts of LA (moving here permanently after I graduate at the end of the year). I'll be in town during spring break later on this month.

I don't think the most expensive parts of LA are Manhattan expensive per square foot. A studio in Midtown Manhattan will cost 3k per month. But that's close to a huge central business district, and LA's business districts have always been more spread out than NY's (NYC only recently developed it's central business districts in Brooklyn and Queens). So maybe areas near LA's central business districts won't get QUITE than expensive.

[ryanms3030]

Originally Posted by seain dublin

And you better like that house, as you won't want to leave it more than half the year. I have done the run from the A/C house to the A/C car to the A/C store, it gets real old when it goes on for months and months. Two or three months of intense heat, OK, when it goes to six months or more, forget it.



I highly doubt that. He must be spending a couple of hundred dollars every week to fly back to Phoenix, times that by four every month. Than you have the room rental. I bet if he actually sat down and crunched the numbers he would find he is further behind doing it this way. In addition to the strain on the family.

He probably has a big casa in Phoenix, and they would have to settle for less house in LA or even rent(but the family would be together), but I doubt he is saving money, he probably never even sat down and looked at the big picture. How could he? He doesn't have the time to sit down and crunch numbers. What a horrible way to live.

I agree. I used to work with someone that commuted from San Diego. People do crazy stuff

[jm1982]

Originally Posted by ryanms3030

Salary is not keeping up with COL here. I make $80k, I interviewed for a job in SF and they were offering $120-150k for essentially the same job I do now. Of course it is all relative because $120k to there probably puts me in the same lifestyle as $80k here. But honestly I need $100k right now to maintain the same lifestyle I had here two years ago. It is what it is. I can start looking for another job locally because that's the only way to get a 20% raise, I can buy a crappy condo and at least cap my home expenses or I can leave. My family and I don't really care about the things LA has to offer that no place else can and we're starting to care about good public schools which LA doesn't seem to offer so we're ready to move on.

I don't think that salaries are keeping up with COL in any of the high cost cities
If you can make $40 k - $50k more in SF it seems that big of an increase should soften the blow

One big advantage to SF is that it seems one doesn't really need a car like they do in LA because of the transit system. Owning and maintaining a car is a huge cost .
I know the Bay Area has crazy high rentals especially right in NYC , but maybe there are still nice parts of Oakland or other nearby areas that could be similar or a little more than what you were paying ?

[NJ Brazen_3133]

I always thought LA was just as expensive and NYC and more so than San Fran. I figured more people want to in LA than San Fran because well, it is a bigger more world class city.

So I take it LA does not have rent regulations? Sounds like an NYC Landlords dream to be in LA.