How cheap was LA? (Los Angeles, Orange: 2015, homes, earthquake)

[Curbed Enthusiasm]

The short answer is you have to go back to the 1950s to find a time when LA was actually "cheap." In my lifetime, however, LA has always been expensive.

Yes, there were time periods when things seemed more affordable. For instance, after the early 90s recession and defense industry layoffs, real estate took a nosedive, but of course you had to be employed with cash on hand to benefit from the correction. If you had $500k to buy a nice house in Los Feliz or on the Westside in 1996, your investment has probably quadrupled by now. Real estate stayed a bit low till around 2000 but nobody I remember was saying "LA is cheap" back then; people always complained about the cost of housing.

Also keep in mind that a lot of now-desirable areas in LA were not desirable very long ago. My teacher cousin got his starter home in Westchester in the mid 90s. It was a small 1940s ranch with no upgrades and right under the LAX flight path and nobody was jumping to live in that area. Those houses were in the $200K range back then and it was considered one of the cheap neighborhoods that was still safe, but that still was sizable money back then (remember how much lower salaries were back then?). Speaking of which, that was also a time when people were picking Simi Valley and Thousand Oaks over the older neighborhoods because of crime. Venice was almost a no-go zone. Silver Lake was considered unsafe. Most places around Hollywood were considered bad. Culver City and Santa Monica had gang problems. It was a different era.

[jm1982]

Originally Posted by Curbed Enthusiasm

The short answer is you have to go back to the 1950s to find a time when LA was actually "cheap." In my lifetime, however, LA has always been expensive.

Yes, there were time periods when things seemed more affordable. For instance, after the early 90s recession and defense industry layoffs, real estate took a nosedive, but of course you had to be employed with cash on hand to benefit from the correction. If you had $500k to buy a nice house in Los Feliz or on the Westside in 1996, your investment has probably quadrupled by now. Real estate stayed a bit low till around 2000 but nobody I remember was saying "LA is cheap" back then; people always complained about the cost of housing.

Also keep in mind that a lot of now-desirable areas in LA were not desirable very long ago. My teacher cousin got his starter home in Westchester in the mid 90s. It was a small 1940s ranch with no upgrades and right under the LAX flight path and nobody was jumping to live in that area. Those houses were in the $200K range back then and it was considered one of the cheap neighborhoods that was still safe, but that still was sizable money back then (remember how much lower salaries were back then?). Speaking of which, that was also a time when people were picking Simi Valley and Thousand Oaks over the older neighborhoods because of crime. Venice was almost a no-go zone. Silver Lake was considered unsafe. Most places around Hollywood were considered bad. Culver City and Santa Monica had gang problems. It was a different era.

Yeah it’s all relative regarding pricing. The prices seemed cheap back then but like you said at the time people mostly didn’t think of them as cheap .
Same thing with Apple stock or Amazon stock . Who was screaming it was cheap when it was even 10th the price it is now ? I know someone that bought just about $1500 worth of Apple stock back in the day how worth over $200k .. nuts .

I’m not too old but I even remember when Area like Culver City and Marvista weren’t viewed as desirable like they are now but now you need to have a couple making six figures to live there .

Look at the priced in Boyle Heights even or East L.A., Inglewood . I’m sure hardly anyone thought property would be valued so high in these areas .

[PilgrimsProgress]

If you live in a rent controlled apartment, rents only go up a tiny percentage every year.

[JustPassinThru]

Originally Posted by dajohnson99

... For those of you who have lived in the LA area for a long time how much did you pay for your house or pay in rent way back when? How cheap was LA?

From my recollection of prices and rents paid by either me or friends:

1945 - 2 bed. ranch on acreage in Sun Valley, $4,500

1950 - 2 bed. in Encino, $10,500

1955 - 3 bed. in Sepulveda (North Hills), $16,000

1963 - 1 furnished room w/Murphy bed in Westlake district, $62.50

1964 - 1 furnished bed. in Koreatown, $72.00

1965 - 3 bed. in Santa Susanna (just beyond LA County), $15,500

1968 - 2 bed. in Studio City, $25,000

1969 - 3 bed. in Simi (next to Santa Susanna), $21,500

[davidt1]

You don't have to back that far. Bought my first house in Canoga Park in 1995 for $140K. It's worth $525K now.

[socal88]

Based on the Case-Shiller Index for Los Angeles, housing has gone up almost 5x since 1987. However, real wages have essentially remained stagnant for decades. If anything, nominal wages have maybe little more than doubled.

Not saying that is was easy per se to buy a nice home in the greater LA area 20-30 years ago, especially when you consider that even before in the early 80s, the prime rate was over 20% in 1980. But the gap between wage growth and home price growth is widening.

Even in areas that have gentrified, it really surprises me what folks are willing to pay especially given how grungy some areas still look despite lower crime.

[timtemtym]

It's pretty crazy. The apartment I rented in 2012 when I moved here is now renting for 700 more just six years later. Not worth it anymore. I am pulling out in June.

I meet so many people here who don't care what it costs because they have no job and their parents are paying the bills. LA attracts a huge population of that from all over the world. It really skews prices here. When LA hype pops, they will move on to the next big thing.

I have an acquaintance I grew up with who is in her 40's with no employment. Her parents bought her a house in Hollywood because they were tired of renting. She complains about how they berate her for not having a job, but...

[Angelino19]

Originally Posted by dajohnson99

I was reading a forum on the SF-Oakland thread and someone pointed out that people used to move to LA because it was "a genuinely cheap city". For those of you who have lived in the LA area for a long time how much did you pay for your house or pay in rent way back when? How cheap was LA?

In 1995 I purchased my home (built in 1940) in an upper middle class neighborhood of LA for 215K. It's now worth 1.3 Million. In the past 5 years about a quarter of the homes in my neighborhood have been demolished and replaced by much larger modern homes valued at 2 to 3 Million.

[MuscleCar]

Originally Posted by JohnG72

There were still run down studios in some parts of the city for around $300 a month in the late 90’s.

In fact if you go a bit earlier, my friends were renting a 3 bd apt in West Covina for $750/mo in the early 90’s.

I rented a 2 BR in West Covina for $1200 in 2003. Then moved to Upland for $950 in 05.

2008 paid $995 all utilities included in Glendale, on Central. They didnt raise the rent when the economy crashed.

Around 2012 is when all hell really started breaking loose on rents.

[ohio_peasant]

Originally Posted by Exitus Acta Probat

The people stating L.A. is cheap must be talking about the L.A. of 50+ years ago. Currently, L.A. is remarkably expensive, and getting more expensive with time.

Originally Posted by jm1982

Even back in the late 1990s homes in the west la area could be bought in the $300s same homes are now going for over $1.4 million .

Originally Posted by ryanms3030

One of my coworkers bought a house in Silver Lake 20 years ago for $275k and could probably get a million for it today ...

Originally Posted by dajohnson99

It's so crazy how prices really started to rise dramatically after the turn of the century...

I lived in the general area in the mid-late 1990s. Housing wasn't "cheap", but it was - depending of course on the specific locality - about 2X (sometimes less) the price of comparable housing in a midsized Midwestern city. A small detached house in a less-preferable part of the San Gabriel Valley might have gone for $150K. A small house on the "north side" of Pasadena could be bought for just under $200K.

Since then, Midwestern housing has stagnated, while LA housing has exploded. That 2X disparity is now 5X or more. That house that would have been $150K in 1999 in South El Monte (not a very desirable area then or now), is today $600K, or more. In contrast, the corresponding house in the Midwest, which was $120K back then, is still $120K.

We can pine for the 1950s as halcyon bygone days for wonderful real-estate deals, but this is needless exaggeration. 20 years is already enough. We don't have to be straw-hat-wearing, lemonade-sipping fossils perched on rocking-chairs outside of the barber shop, reminiscing about the lost opportunities of our youth. Today's typical Gen-X'er could have bought a modest piece of property in LA 20 years ago, and enjoyed capital-appreciation far exceeding that of the stock market.