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I think most people will agree if you are lower income it's not a great place to live. If I was stuck in job making $45k-$50k in perpetuity I'd definitely be out to somewhere else. If you are a white collar professional or a skilled blue collar making say $75k+ I think the calculus changes. You can afford to live more comfortably here and your opportunities for salary growth with be much larger than most cities. Then you have to chose a balance of career vs lifestyle. I have friends in the Midwest who turned down significant raises to move here because they wanted a big house and were afraid of the traffic. Not being able to afford to live here wasn't the deciding factor. Point being I think SoCal is "affordable" for a lot more people than it's given credit for. Looking at medians doesn't really tell the whole story.
OC is definitely expensive, but the US Census (2011-2015 estimate) actually shows the median household income to be $76,509 with a meanhousehold income of $103,752.
Median Household Income was broken down as follows:
So, using 2011-2015 dollars, about half of OC's married-couple families make more than $101,941; and, excluding investors, these are probably most of the people who are now buying homes here.
Mean does not correctly show income. The "mean" is a statistical average including statistically insignificant ones. But even the mean/median income is way lower than you need to purchase a home in OC.
Meaning... I can have 9999 people making $1/hr but 1 guy making $1M/hr and the average wage will be $100.99/hr...(9999+1M/10000) Is that correctly represented?
Hence... it's the median that correctly represents the data. The median will say $1/hr because that's the middle of the entire sample set.
Using the median will ignore the effects of super-high salary or super-low salary workers pay from skewing the results of regular folks.
Then again, even if those families with over 102K are buying homes... the median home price in OC is astronomical even for their salary. So only the richest of the richest can technically afford it. You'd need an income of at least $200-250K to afford to buy the median priced home if you want to support a family and still be able to enjoy a middle class life.
Mean does not correctly show income. The "mean" is a statistical average including statistically insignificant ones. But even the mean/median income is way lower than you need to purchase a home in OC.
Meaning... I can have 9999 people making $1/hr but 1 guy making $1M/hr and the average wage will be $100.99/hr...(9999+1M/10000) Is that correctly represented?
Hence... it's the median that correctly represents the data. The median will say $1/hr because that's the middle of the entire sample set.
Using the median will ignore the effects of super-high salary or super-low salary workers pay from skewing the results of regular folks.
Then again, even if those families with over 102K are buying homes... the median home price in OC is astronomical even for their salary. So only the richest of the richest can technically afford it. You'd need an income of at least $200-250K to afford to buy the median priced home if you want to support a family and still be able to enjoy a middle class life.
I fully understand the difference between the mean and the median. Did you notice that I only mentioned the mean once, and did not use it when discussing affordability? You're grasping at straws.
Also, by saying that people need an income of at least $200-$250K in order to buy the median priced home, you are ignoring the fact that some of these homebuyers may have a large down payment from the sale of another home to apply to the purchase.
Face it, people are buying homes here, even if you don't agree with their financial decisions.
BTW, where is your link to support the following?:
Quote:
Originally Posted by man4857
The median household income for the entire LA Metro area (LA, OC, Inland Empire) is about $46K.
The median household income for the entire Phoenix Metro area is about $44K.
Src: US Census
If you want to get specific: Median Income for OC alone is $62K.
The median income buyer doesn't have to be able to afford the median home to have a healthy market. You have out of area investors, people with multiple homes, people with large down payments, etc... There are lot more factors to housing demand in a global city than just the annual income of the local residents.
I fully understand the difference between the mean and the median. Did you notice that I only mentioned the mean once, and did not use it when discussing affordability? You're grasping at straws.
Also, by saying that people need an income of at least $200-$250K in order to buy the median priced home, you are ignoring the fact that some of these homebuyers may have a large down payment from the sale of another home to apply to the purchase.
Face it, people are buying homes here, even if you don't agree with their financial decisions.
BTW, where is your link to support the following?:
Take Households + Non-Family Households (74,344 + 49,389) / 2 and you get $62K in 2010 dollars. I'm using 2010, where the last actual survey was done.
As family/married couple households are included in households.
By saying 200-250K, that's a general personal financial rule to gauge affordability of real estate with 2.5-3x your annual income should be acceptable. That's not out of thin air as you'd like to think.
I obviously know that. Which is why the price is where it's at. Too bad no one can afford to be there.
What if you lived in a blimp and floated around the area? It could be a new hgtv thing "blimp living", how to lower down a belay line to get to your favorite coffee shop, wench types to get you back up. Then teather tie downs will be a big thing.
Take Households + Non-Family Households (74,344 + 49,389) / 2 and you get $62K in 2010 dollars. I'm using 2010, where the last actual survey was done.
As family/married couple households are included in households.
By saying 200-250K, that's a general personal financial rule to gauge affordability of real estate with 2.5-3x your annual income should be acceptable. That's not out of thin air as you'd like to think.
I obviously know that. Which is why the price is where it's at. Too bad no one can afford to be there.
Banks are approving the loans even if you don't think they should. Why do you spend so much time worrying Orange County homebuyers?
Take Households + Non-Family Households (74,344 + 49,389) / 2 and you get $62K in 2010 dollars. I'm using 2010, where the last actual survey was done.
As family/married couple households are included in households.
By saying 200-250K, that's a general personal financial rule to gauge affordability of real estate with 2.5-3x your annual income should be acceptable. That's not out of thin air as you'd like to think.
I obviously know that. Which is why the price is where it's at. Too bad no one can afford to be there.
Take the actual Census figures and it can help explain why some people are able to be approved for homes in OC.
I repeat, half of all OC married-couple families make more than $101,941; and some have large down payments from the sale of a previous home. It doesn't matter if you don't think they should buy a home here.
Take Households + Non-Family Households (74,344 + 49,389) / 2 and you get $62K in 2010 dollars. I'm using 2010, where the last actual survey was done.
As family/married couple households are included in households.
By saying 200-250K, that's a general personal financial rule to gauge affordability of real estate with 2.5-3x your annual income should be acceptable. That's not out of thin air as you'd like to think.
I obviously know that. Which is why the price is where it's at. Too bad no one can afford to be there.
2.5x-3x is a good rule of thumb for average income owners. If you are making $200k/yr and buy a $500k house you will be netting almost $10k in cash flow after your mortgage. That's more than enough for most people to live on and most can certainly afford more.
Take Households + Non-Family Households (74,344 + 49,389) / 2 and you get $62K in 2010 dollars. I'm using 2010, where the last actual survey was done.
As family/married couple households are included in households.
By saying 200-250K, that's a general personal financial rule to gauge affordability of real estate with 2.5-3x your annual income should be acceptable. That's not out of thin air as you'd like to think.
I obviously know that. Which is why the price is where it's at. Too bad no one can afford to be there.
You're using 2010 numbers. Dude that was 7 YEARS ago.
So how are so many people moving here. And someone is buying these houses that are coming up for sale. So obviously some can afford it.
So Cal specifically and California generally is expensive. There is no secret that it is. Whining and crying about it won't change that. Ok people, that don't make a lot of money have to struggle. That's nothing new.
If all those people moved away let's say to Phoenix, the COL in Phoenix would of up also. So would rents. So would house prices. But they aren't. Which means Phoenix has a balanced COL. And if all those people moved away we would have a lower pool of labor and buyers so now the prices would fluctuate. To attract labor wages would go up. Rents would have to go down to attract renters. If the demand is there they may not go up. Either way
We're talking. Aboit tow totally and completely different markets
Quote:
Originally Posted by man4857
Sure, you can play the free market game. That's what it does. However, most people don't need a $50k jacket to survive, but people still do need a jacket to keep warm. Everyone needs a place to live regardless of the price. That's the difference you don't seem to see.
Anecdotes don't support any points you're trying to make. Statistics does. It's well known, the median income in various places, does not scale in relation to COL especially CA.
The median household income for the entire LA Metro area (LA, OC, Inland Empire) is about $46K.
The median household income for the entire Phoenix Metro area is about $44K.
Src: US Census
If you want to get specific: Median Income for OC alone is $62K.
Your COL difference between LA Metro/Phoenix Metro is only about 4.5% (i.e. you earn 4.5% more in LA vs Phoenix) when in reality COL it is not 4.5% more. LA Metro is way higher than a 4.5% difference.
Or in the OC specific case: 40% more for a household. But the COL difference is 56% more: https://www.nerdwallet.com/cost-of-l...-orange-county
That above calculator does not take into account differences in taxation or other things that might cost more (like auto insurance, which is easily 2x)
So yeah, you can point to people you know who moved to CA who makes six figures or whatever. However they're a dime to a dozen and says nothing about the entire metro area.
Anecdote my ass. I interview well over 200 inquiries and out of those go through about 40 applicants in a week. That's as much as I can process between work home and rentals when a rental comes up vacant. And considering I get calls about 1/2 hour after the ad is up I say the demand is there.
I have at least 2-3 unsolicited offers to purchase my rentals. These offers are for each rental so there is a plethora of those coming every month. The demand to buy is also.
When you have a lot of people living here you have a large pool of labor and buyers. You don't have that in Phoenix. I doubt Phoenix has anywhere near the influx of people going into it. So their COL is balanced.
Here the demand for housing is WAY WAY WAY different than Phoenix AZ. There is no way you should ever compare the two. I do t even understand why you're comparing LA OC AND I.E. with Phoenix.
I dont think you have any idea wth you're talking about. You're using g two completely different metro areas with different labor pools and location demand not to mention outdated census numbers. . I have three coworkers who ALL purchased or are in the process of selling and buying a new house. That's just the three guys i work with. A few of my friends also bought houses. Most make over 100k a year if you add in dual incomes. The single income ones pull in about 80k a year. So 8 out of about 20 people I know are either buying or have already bought houses. Most of the people I know are homeowners.
Houses in OC LA and I.E. are selling so obviously someone is buying, be it a private investor a conglomerate or a person buying a house.
Things have changed since 2010
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Did you notice that I only mentioned the mean once, and did not use it when discussing affordability? You're grasping at straws.
