Rising home prices affecting home affordability in Los Angeles
Although the rise in home prices in Southern California has been great for market recovery as well as sellers and homeowners, it has also affected home affordability for the average Los Angeles buyer.
On average, only 24% of homes on the market are affordable to a home buyer with a median income. Considering the skyrocketing prices in Los Angeles County during the past year – earning it the title of the nation’s third most expensive city – the selection for these homebuyers in is minimized by home prices.
Median home prices in the six-county Southland has risen by 24.6% in the last year to $385,000 in August. In Los Angeles County, it has risen even higher, shooting up by 28.1% to $429,000. At the same time, the county’s individual income hasn’t seen the same explosive growth. With the 2012 LA county median annual income of $53,001, a house selling for around the $271,000 price point is all many can afford.
The gap between affordability and average income can be attributed not only to home value appreciation, but also to increasing mortgage rates and reduced inventory, as investors sweep up lower cost homes. For homebuyers, the recent cooling of the Los Angeles market will be a welcome turn of events.
Need help finding a home within your budget in the Orange County or Los Angeles areas? Contact Blue Pacific Property today – we’re here to help!