Los Angeles Real Estate (Long Beach, Glendale: condo, houses, neighborhoods)

[JohnG72]

Ok so I posted this else where and thought it might be relevant here.

The biggest single factor in Los Angeles being expensive is the cost of housing that includes above average schools and commutes under one hour.

Here is what I posted:

But I do think a market is out of whack when a family of 4 making $150K a year cannot reasonably purchase a 2000 sq ft 3 bd/2ba home in an area with above average schools within a 45 minute rush hour commute of most major jobs centers in LA.

Major job centers being: Downtown, SM/Century City, South Bay, Long Beach.

The only communities where I can see above average schools and a home with those parameters are Whittier, West Covina, La Mirada/La Habra, Lakewood, and Northridge, and then only parts of those areas have above average schools. Also none are within 45 minute rush hour drive of job centers except Lakewood's proximity to Long Beach and South Bay.

And it seems to me that it's borderline insanity that a family with an upper middle class income cannot afford to buy a normal home in even a middle class neighborhood.

I figure this is relevant because people are always asking about the high cost of living in Los Angeles. And the truth is...yeah, state personal income taxes are a bit high, yeah, gas is more expensive. But not really by that much. The truth is that the housing cost in Los Angeles is beyond out of line with incomes. Neighborhoods like Burbank, Culver City, Lakewood/Long Beach, El Segundo, Sherman Oaks, Valley Village, Pasadena, Glendale etc seem to have a very very long way to fall in terms of real estate price.

So I'm hoping this posting can be used to educate new arrivals as to actual real estate costs as well as pointing out areas that may be affordable and provide a good quality of life.

[disgruntled la native]

most people who live in homes in LA bought it a long time ago, or its been passed on thru the generations.

[BRinSM]

i disagree. my wife and i have a household income of about $150k and are looking to buy a house. we don't have kids yet, but we want to buy a house this year. it will be 3/2, but it will not be 2000sf and that is one of the compromises you have to make at that income level in LA. square footage is a premium in LA, even moreso than updated kitches/bathrooms. having said that, we've looked at houses in encino and sherman oaks, which are considered to be nice neighborhoods. even the schools are decent through the elementary level, middle school and up are a different story. both encino and sherman oaks are within 45 minutes of the westside, even in regular traffic. so your scenario is actually feasible as long as you don't mind less than 2000sf (IMHO, anything over 1500sf should be ample for a family of 4).

i also disagree is that pricing will drop drastically. there are plenty of homes that people could afford given median incomes, but you'd have to either buy a condo or live in a neighborhood that most of us here would feel uncomfortable in. there's also a lot of wealthy to very wealthy people in LA that can and will pay for real estate here. if that was not the case, then prices would have dropped more than they already have. IMHO, prices aren't going to move until either 1. incomes go up or 2. interest rates go up. my guess is that the government will continue to keep downward pressure on rates until incomes start rising again, then we'll see a coordinated increase in both. at that time home prices will either remain flat or see a very slow increase.

you have to also remember that this isn't just a phenomenon that occurs only in LA. you can find this in all of the major coastal cities of the pacific as well as the northeast (SD, SF, Seattle, NY, DC, Boston, etc...). these are all very expensive places to live and people who want to live in nice neighborhoods with goods schools that aren't far from job centers have to pay huge premiums compared to places like St. Louis or Des Moines.

[JohnG72]

?

You discounted half the caveats I placed(size and schools), which are arguable the number 2 and 3 concerns people have, after safety.

Then as far as pricing, you completely discount the SFR caveat.

[BRinSM]

Originally Posted by JohnG72

?

You discounted half the caveats I placed(size and schools), which are arguable the number 2 and 3 concerns people have, after safety.

Then as far as pricing, you completely discount the SFR caveat.

i'm not discounting what you are saying, i'm saying that compromises have to be made to live in/around LA and that there are obviously plenty of people willing to make these compromises. unless you are making serious coin, you're going to have to live far from major job centers to afford a 2000+sf house. same goes for schools. if you want good schools k-12, housing is expensive even in areas far from job centers (think thousand oaks) because of demographic issues. and as i said in my previous post, this isn't a situation that is unique to LA.

[CA4Now]

Originally Posted by JohnG72

...it seems to me that it's borderline insanity that a family with an upper middle class income cannot afford to buy a normal home in even a middle class neighborhood.

Oh, it will be middle class. But the public schools will be awful. It's probably been this way here for at least three decades.

...people are always asking about the high cost of living in Los Angeles. And the truth is...yeah, state personal income taxes are a bit high, yeah, gas is more expensive. But the truth is.... housing costs in Los Angeles are beyond out of line with incomes. I'm hoping this posting can be used to educate new arrivals as to actual real estate costs as well as pointing out areas that may be affordable and provide a good quality of life.

Thank you. I hope people pay attention because you're absolutely right.

[Lovehound]

John, I don't understand why you believe the market should be fair. I believe in supply and demand economics, and equilibrium. If there's more supply than demand then the prices go down. If there's more demand than supply then the prices go up. The only fairness here is the market dynamics. If you want a property more than others then you must pay more. If you own a property and overprice it then there's less demand and you will take longer to sell it, or you won't be able to sell it at all (there's lots of that, e.g. properties on the market more than 180 days).

What could be more fair than a free market? If you earn 150K and you can't afford the house you want here, either earn more or adjust your expectations downwards, or just live somewhere else. You should have no expectation that the market has some obligation to be fair to you.

[JohnG72]

Originally Posted by Lovehound

John, I don't understand why you believe the market should be fair. I believe in supply and demand economics, and equilibrium. If there's more supply than demand then the prices go down. If there's more demand than supply then the prices go up. The only fairness here is the market dynamics. If you want a property more than others then you must pay more. If you own a property and overprice it then there's less demand and you will take longer to sell it, or you won't be able to sell it at all (there's lots of that, e.g. properties on the market more than 180 days).

What could be more fair than a free market? If you earn 150K and you can't afford the house you want here, either earn more or adjust your expectations downwards, or just live somewhere else. You should have no expectation that the market has some obligation to be fair to you.

Nothing to do with fairness, everything to do with affordability.

Median family income in LA is somewhere around $55K.
Relatively few families earn even as much as $150K a year.

At some point, prices will decline to meet income levels.

Thats all.

[CA4Now]

Originally Posted by JohnG72

At some point, prices will decline to meet income levels.

That's doubtful. They haven't since the mid-1970's. If anything, residential real estate will continue to become even more unaffordable here; there are just too many people who want to live in southern CA. People will continue to have to move very far inland to find anything that would match their income, as they could in the pre-1980 market. Gone are the days when a 3-bedroom, 1200 sq ft home in a middle class neighborhood was three times one's income (which could still found, without a 3-hour commute to work and back, even in the mid- 1980's.)

[VillageLife]

Someone forgot Arcadia,,Polytechnic,Diamond Bar,Hacienda Heights,Walnut have excellent schools.