For the average Angeleno, the prospect of owning a home is starting to look a lot more like a preposterous fantasy. Earlier this week, Curbed LA featured 10 great starter homes in Los Angeles, ranging from $459,999 to $700,000. But those prices are out of reach for many buyers, and very few of them were near the city center (just forget about the Westside).
According to Trulia, median starter home prices in the Los Angeles metro area are actually at a more reasonable, but still intimidating, $334,000.The metro area includes much of the Inland Empire, along with Santa Clarita, Oxnard, and parts of Orange County. Within LA County, prices are even higher.
Trulia considers starter homes to be those valued in the bottom third of all housing in the area. In Los Angeles, where median income is less than $60,000, the average home buyer would need to save 89.4 percent of her monthly income to afford a starter home. And that percentage is growing; the share of income homebuyers in LA needed to afford a starter home went up 5.6 percent over the last year—the seventh-largest increase in the nation.
Compounding the problem is a lack of supply. Nationwide, the amount of starter homes on the market dropped more than 12 percent in the last year. Meanwhile, prices rose 6.4 percent.
The depressing bottom line is that home-buying is becoming less and less of a possibility for most LA residents. That helps to explain why the city’s millennials are shying away from home ownership, and why so many low and middle income Californians are leaving the state for greener (i.e. cheaper) pastures. Of the 10 US cities in which the rate of affordability decreased most last year, five are in the Golden State.