If you have been living in L.A. County for any length of time at all, you probably already know housing prices have been getting out of control in the past few years. This is nothing new, despite the recent recession, housing prices in this area have continued to rise due to the declining availability of homes for sale. How bad is it? In a recent report issued by the California Association of Realtors issued on Wednesday, November 9th, 2016, anyone who is interested in buying a home in either Orange or Los Angeles County needs to be earning at least a six-figure income.
Let’s Talk Numbers
It’s far too easy to generalize when talking numbers, especially when it comes to incomes and housing prices. However, according to the report, the average homebuyer in L.A. County would need to be earning at least $104,000 in order for them to be able to afford a median-priced single family home. The current average price in this category stands at $536,720 for the third quarter of 2016 and at least 26 percent of the households in the area fall into this category.
The report goes on to say that the Inland Empire is still among the region’s most affordable housing markets. It shows that forty-six percent of the households in this region would be able to afford a median-priced home. The median price for single-family homes in this area is $319,000 requiring a minimum income of only $62,000 to be able to buy a home.
Over in Orange County
In Orange County, the numbers are not quite so friendly as the median home price is approximately $740,070. With prices this high, the average household would need to have an income of $143,850 in order to be able to afford to buy a home, based on Q3 2016 figures. Unfortunately, only 26 percent of households in Orange County have this level of income.
All of these figures are based on the buyer being able to make a 20 percent down payment. They are also based on the idea that the buyer’s house payments are no more than one-third of their total monthly income. While affordability rates have shown some sign of improvement over the past year, they have been in a state of steady decline since 2012 and are now considered to be among the lowest in the country.
Earlier This Week
Earlier this week, the state Realtor group held a summit on housing in Century City. The purpose of the meeting was to discuss California’s current “affordability crisis.” California Association of Realtors chief executive Joel Singer says that ” California’s high cost of housing is putting the squeeze on the state’s residents. With a historical low homeownership rate of 54 percent and skyrocketing rental costs, the dream of owning a home in California is evaporating.”
In comparison, the national affordable housing affordability rate hovers around the 57 percent mark for all households in Q3 2016 and at 31 percent for the state of California.