How do people afford to live in L.A?

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Sav

The vast majority of homeowners didn't pay that much. It's just first time home buyers that are having the biggest trouble finding homes to buy. Five years ago homes cost less than 1/2 of what they do now! So most people in LA and California already owned homes that originally cost them less than 250K. People in LA and CA in general are not that rich; they are house rich and cash poor. Most of the people who live in homes worth 500K and up wouldn't be able to afford their own house if they were making their first purchase but like most people, they purchased their home before 2000. And many homeowners who decide to move into a new house can afford to do so b/c of the equity from their previous home allows for a large down payment. Many families who make $60k-75k a year live in homes worth $500-750K b/c they bought it for $250k or less before the most recent real estate boom.

So it's mainly the first time homebuyers that are having trouble be able to afford a home in CA. Most people here already owned their homes before they doubled in value. 12 years ago you could have bought a house in LA for less than $200K easily and in a good neighborhood too. We do make more money here but not anywhere near what is needed to afford a median priced home; it's mainly those that already had homes and equity that can afford to buy.

KatEyez4

People rent and share apartments. I live 5 mins from work, so I don't spend much on gas (entertainment, stores, and grocery is walking distance). Plus, my salary is higher in LA than it would be in most other places.

Utilities tend to be lower than in other areas as well.

AtiaoftheJulii

The average pay is much higher there than say in Michigan.

chieromancer

I just read an article in the LA times that said the average home price is around $380K, if memory serves. But that's the entire area, including the inner city and the inland empire. Like previous poster said, prices range wildly depending on area

House prices are astronomical, that's why most homeowners have at least two wage earners.

There are a lot of renters here. Rent prices are the third highest in the country. The average renter pay 40% of their income in rent. Experts recommend no more than 1/3. Insurance and gas prices are higher, too.

Other things are cheaper, like utilities and food. You don't have to pay for parking in many areas, like you do in say, NY.

Wages are higher here, in general, at least the white collar jobs are. The job market is vast. And, of course, we have the weather, at least in winter.

So, we economize where we can, run up our credit cards if we can't.

For us long time Angeleno's, there aren't many places we would rather live that would be any better.

birdgirl

450K is actually too low of a price for a house in LA.....more like 650K and up!! I rent, can't afford to buy and probably NEVER will be able to buy if I stay here in So. Cal...but this is where my career is and I get paid more for it here than I would anywhere else. I have been able to upgrade and rent a house for the first time in my life...I have only ever been able to afford apartments.

Diamond in the Rough

The average home is 600+, 450+ will land you in Watts or the country or maybe East L.A., and yes its challenging..........

HMFdez2

Well... it used to be that you could buy a house (a couple of years ago) and then refinance, that way you could actually afford a house, even if it would cost 400K or 500K, but now that the market is sort of slow, all you can do is rent and wait. There are 88 cities in L.A. County and they have different areas where rent could be really expensive or pretty affordable, especially in the bigger cities (such as L.A. itself, or Long Beach).

Everything else, as far as food and other things needed for everyday life (even medical care, Huntington Park has a lot of reasonable clinics) is pretty affordable or you may get some help from the state and county if you know where to ask; and I'm not talking welfare necessarily, there are a lot of community organizations or some "breaks" through community programs because you may be considered "low income" for the area where you live; for instance, Long Beach has million-dollar manssions but you can rent a $500.00 studio/1 bedroom about one or two miles away.

There are some really cheap places to get everyday things (like 99 cent stores and swap meets like Paramount, San Fernando, Alameda, etc., you name it, they got it!). Also, clothes and shoes, you can't beat the fashion district: brandname stuff really cheap, I've bought three suits for less than $200.00; and if you go to the stores that sell electronics, just watch out for fake products, and "disposable" electronics.

Another thing that a lot of people take for granted is our public transportation system (Metro). You can get a "day pass" that is good all day on the day you buy it 'til the next day at 2am. You can practically go everywhere in LA for just $3.00. And dining is, also, reasonable in L.A. Good food, fair prices. And don't be afraid of the Mexican Style Hot Dogs they sell at the Metro Stations or at the street corners, or the Corn on the cob (Nacho Libre Style!) with Mayo, Butter, Cheese, and some pepper sprinkled around it: Heart attack on a stick! Or the Mid-night Tacos at any Taco Stand or Taquerias.

Nonetheless, the best things in life are still free. Just enjoy the beaches from Malibu and Zuma beaches to Hermosa and Redondo Beach; 3rd Street Promenade and The Pier in Santa Monica; Universal City Walk; The Pike and Shoreline Park, and Pine Square in Long Beach; the Griffith Obsevatory, and all the Museums; or the cliffs along the Palos Verdes Peninsula, you can see Santa Catalina Island on a clear day. There's always a place to go. Enjoy L.A.: Things to see, people to do!

Steph C

they dont. they are all living on credit. well, all is a generalization, but a lot of them are in debt up to their eye balls. i moved out of southern cali 8 years ago and i am so glad that i did. it is a great place to vacation, but way too expensive to live

CrankyJz

i got lucky and bought my home for just 200k about 10 years ago. now it's worth around 600k. it's crazy. food cost is cheap. insurance is about 1000 bucks per car per year. health insurance gets pretty expensive. you can live pretty good with over 60k annual salary.

sal

You don't always need to buy. You can rent. Wages are higher there two. That helps.

Bridget

Well if you get a good home loan and work full time it is definitely easier. Hit me up if you need Real Estate Financing in California! I will get you prequalified for free.

Jackie

The prices of housing in Los Angeles is *extremely* varied. Definitely above national average though. At $500,000, you can get a small house in a not-so-great area, like East or South L.A.

In Westside Los Angeles, places like Malibu or Beverly Hills, 1.2 million is below average. The average list price in those places is around $4.4 million...According to the article I linked, a two-bedroom, two-bathroom **mobile home** perched on a lot in Malibu is selling for $1.4 million....!

In the San Fernando Valley of Los Angeles, which is considered middle-class L.A. suburbs, you can't find a decent home for under $700,000.

Learner

I used to think that too, but now I think it would be just the same as living in Ireland. I am in Ireland and prices have rocketed here but everyone just seems to manage. It's either that or go to LA.

lauren

I think the average salary is higher.
I live in a small city in north orange county, and all the homes in our neighborhood are $600,000-$700,000, and we've got million dollar homes surrounding it.
and we aren't even talking nice california beach homes here, so yeah it is pretty crazy.
many people do live in apartments, and I know a few who rent.

jeffpsd

Most of them slum it. Better to live in San Diego, or anywhere else in the world.

fukuoka

well, they can afford to live there because they're rich, kids living there have rich parents, and older people who want to move there already have a lot of money that they saved up from before to afford it.

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