No surprise here: Los Angeles is still extremely unaffordable.
The City of Angels was again ranked as the country’s second least affordable city for potential home buyers, according to a report published Monday by the website RealtyHop.
“It basically tells us a story that we’ve heard for a while,” said Shane Lee, a computer scientist at the company. “People often can not afford to buy. And especially in Los Angeles. ”
A family that makes the median income should spend over 80 percent of it on mortgage payments and property taxes, she said.
RealtyHop publishes a monthly index of affordable housing that uses census data and the site’s own list numbers to rank the 100 most populous U.S. cities by affordable housing. In the recently released September index, the company’s data showed that the median price of housing in the City of Los Angeles was $ 930,000, while the city’s median household income is $ 62,000. A family earning that amount will need 82.5 percent of it to buy a home at an average price.
“And you have to think about the payout, too,” Lee remarked. To put it bluntly, another study by the company found that the average home buyer in LA had to save up for at least 13 years.
New York, with a slightly higher median house price, ranked as even less affordable, with the average family having to pay over 82.9 percent of income to buy a median-price home.
Miami, where average house prices and incomes are lower, was third least affordable with 82 percent, followed by Newark (72 percent) and San Francisco (66 percent). Detroit, Wichita and Fort Wayne, Indiana ranked as the country’s most affordable of the 100 markets (all were below 20 percent).
LA’s median home listing price in August was $ 940,000. In June, when it was at $ 955,000, the city ranked as the country’s least affordable, and New York was a close second.
But the small reduction probably only happened because cheaper properties hit the market, not because home values fell, Lee said.
For several months, Southern California’s housing market, particularly its luxury market, has been glowing white, driven by intense buyer demand and limited supply. A second-quarter sales report showed the region had multiple sales records, including a median sales price of $ 1.75 million for Los Angeles’ Westside and Downtown, up 15 percent from a year earlier.
Another report this month showed that the contract signing of the area had slowed down, even though appraiser Jonathan Miller told The Real Deal at the time that the reason was lack of homes for sale. “It’s not that demand is cooling,” Miller said. “It’s that the sales inventory is about to collapse.”
Last week, the California State Assembly passed a measure that allows for up to four units in most single-family zones throughout the state. The Senate has also adopted a version of it. The measure, designed to address the state’s serious affordable housing crisis, could add 700,000 homes, though experts say far more is needed.
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