A typical median-priced home in Los Angeles County out of reach for the vast majority of residents, according to a new analysis from the California Association of Realtors.
According to the data, just 29 percent of potential homebuyers can afford a property at county’s median price of $485,800. At that price point, a nearly six-figure household income—$99,830—is required to comfortably afford the $2,500 per month payments that would accompany the purchase.
Recent Census estimates place the median income in LA County around $56,000—more than $40,000 short of the homebuyer income suggested by the association of realtors.
It’s worth noting that the analysis assumes a 20 percent down payment, which would in this case total $97,160—a hefty chunk of change that would take even high-earners years to save.
Still, it’s certainly possible to get a loan with a smaller downpayment. FHA loans, for instance, can be as low as 3.5 percent. Of course, a smaller downpayment also means higher monthly invoices, which can leave homeowners stretched precariously thin.
The outlook is slightly brighter for LA County buyers investing in a starter home. According to association of realtors, around 48 percent of residents can afford an entry-level home with a median price of $412,950. That’s still less than half, of course, but it’s an improvement.
After a 20 percent downpayment (of $82,590), mortgage, property tax, and insurance payments would total $2,090 per month—the same price as a median one-bedroom rental, according to Zumper.
If all this data makes the dream of homeownership seem impossible, take some schadenfreudian comfort in the fact that LA County is still far more affordable than many other parts of California.
In Orange County, where it requires a salary of $154,120 to afford a median priced home, only 21 percent of buyers can afford to do so. In San Francisco, only 13 percent of residents make the association of realtors’s suggested income of $267,130. Even a starter home in San Francisco County requires an income of $167,800.
Incredibly, a majority of residents can afford to buy a median-priced home in just seven of the 43 counties included in CAR’s analysis. In other news, many LA residents seem to be resettling in Arizona and Nevada lately.