What can you get for half a million, the median price for an L.A. home?

And how many in L.A. Country can afford the median price?


LAT: $500,000 question
What exactly can you get for L.A.'s median price of half-a-million bucks? Try a bidding war for a starter home in your second-choice
neighborhood and a throbbing headache.


PRICE: $499,000
(Anne Cusack / LAT)

By Darrell Satzman, Special to The Times

....Prospective buyers looking in that ballpark a decade ago were a semi-exclusive group with their pick of the best Los Angeles County neighborhoods and a huge inventory of lovely, single-family homes.

Nowadays, $500,000 is right around the median price of a home in the county — and buyers in that range know all too well that the middle of the road is not an easy place to be. In many neighborhoods, it buys only a starter home or condominium, and the competition for those properties is strong....

***

Listings often tell only part of the story. A recent sampling offers a glimpse of what's out there: $499,000 for a one-bedroom, one-bath condo in Rancho Park; $499,000 for a two-bedroom, one-bath home in North Hollywood; $499,000 for a two-bedroom, one-bath home near Silver Lake; $495,000 for a two-bedroom California bungalow in Eagle Rock; $490,000 for a three-bedroom, one-bath house in Montebello....

***

Although it had been spruced up, the 82-year-old home was a bit worn, the bedrooms were small and the outside was painted an arresting shade of red approaching the color of pomegranate juice. The asking price for the 1,080-square-foot home was $485,000....The California Assn. of Realtors estimates that today only 13% of L.A. County households can afford a median-priced home.

"It's a shame what's happened in L.A.," she said. "You find you can't get into a home."

http://www.latimes.com/classified/realestate/news/la-re-median13nov13,0,5413359.story?coll=la-home-headlines

.. how competition for these homes is fierce, but only 13% of LA County can afford a median priced home?

As for me, that kind of price is way out of my ball park. I don't live in LA, and I rent.

new construction is going to be more expensive; cheaper is going to be apartment/condo/townhouse. or, a much less desireable neighborhood.

Another report says that very few home buyers are first time buyers. So if you've already had a house with decent equity you may be able to come with the $100,000 just for a down payment for a traditional 80% mortgage.

But very few are going for that traditional loan, either.

and then go for it. if they're buying a fixer-upper, they assume they can get a home equity loan for the improvements.

if they have to qualify based on a low first-year rate, then the interst rate jumps after 1, 3, or 5 years, this does not worry them because they assume they will get raises, or home equity based on continuing price increases, etc.

the people who suffer most in a housing crash are the people who just bought and don't have that price increase they relied upon.

... that's enough to start a bidding war. *sigh*

While it's little consolation, it's worse in other areas of California. I caught a tidbit on NPR about seven years ago, an interview with a realtor in the Silicon Valley area. A couple came to his agency with a two-bedroom 1930s bungalow in Palo Alto on a postage-stamp lot (somewhat typical for the area) and were asking close to $400K, even though the property needed lots of work--it was pretty much a fixer-upper. The realtor thought that was near insane (remember, seven years ago) and thought that any agent able to sell at that price would have had to commit a crime to do so. Then, he said, it sold a week later for $529K....

but know well people who do. A lot of houses they've looked at have been owned by people who don't live in L.A. Speculators, turning houses over, I think? And some are owned by people who live there, but have also been turning houses over. As to who can afford them, the article points out that many of the few who do buy are stretching themselves very far.

so a 3 bedroom home can have 27 adults in it, a 4 bedroom, 36. That 3 bedroom will fetch $649,000, which means a mortgage of something like, what, $3500 to $4000 a month (haven't a clue, as I haven't bought in years). So if you only have 3 families living in the home, the cost is less than $1500 per family. And if you're really friendly with your relatives (or willing to share with a host of people you don't know), 13 couples can live for about $300+ a month each pair.

And still, some people say housing in South California is expensive. . .

..could share the expences with your fellow workers....about 50 ways..

for sale for less than a week, and then some yahoo pays over what the seller is asking. Who the Hell is buying these overpriced houses? I couldn't afford to buy my own house if my life depended on it - it's just ridiculous.

looking for that first home purchase. they buy with their hearts, not their heads. and they think they're bidding with monopoly money because they're not used to dealing with such large figures and don't realize the impact.

they simply hope that prices won't plummet while they're left holding the bag.

What you will find are people who buy these homes but cannot afford to furnish them. I once worked with a woman who worked two jobs to afford a home in Temecula California. Mind you she was married so she worked two full time jobs and her husband worked one. I asked her why she was working two jobs and she told me they did not have a snitch of furniture in their home, just beds. Quite a few people living outside their means in California because they got into an overpriced home. You cannot even rent a nice home in San Diego without paying an arm and a leg. I don't know when that bubble is going to bust but if it ever does it's going to get ugly in California. I hear talk that the bubble will never bust in some parts of the country but you never know.

who have even run up the cost of rentals so that you can never save for a down payment. I finally gave up on renting 1-BR apartments and condos in favor of a more expensive 2 BR OLD (1920s) house with some architectural character (rare in LA) and a BIG yard with fruit trees. I did it for my sanity. I wouldn't invest in this overinflated market to save my life.

At least I get to garden now.

indicating that as more people make the decision you did, the rental market will rise!

over $600 a month more if I were just moving into it today, with the rents rising. FORTUNATELY, we have rent control in LA City and they can't raise the rent more than 3% a year.

are up. You know what that means? Out of county buyers - read LA/SOCal folks either buying a second home or cashing in and moving north. We are becoming a county with no middle - it's all either retirees or college kids. One local town lost a candidate, who was offered the job as Police Chief, because he couldn't afford to live here. Took a job elsewhere.

There's no simple answer and no real villains in this whole thing, but it's not a good long term scenario for the health of a community.

closer to chicago probably 70-100 thousand

My husband and I paid $94,600 for our 2-story, 4 bed, 3-bathroom, 1800 sq. ft. home 7 years ago.
It's prob valued in the $120-$130K range right now.
Somewhat eases the angst of living in a red state.

I think what irks me the most about these houses, as I look with younger people who are trying to buy, is all that money -- and just one bathroom. As you say, absurd! I wish L.A. buyers would just start saying no.

That looks to be worth about $20,000....if that.

Big article about it in the Post yesterday:

Lynn Edmonds and his wife, Sebnem, could barely wait to sign on the dotted line back in May when they committed themselves to pay $796,000 for a three-floor townhouse under construction in Alexandria's Cameron Station.

But since May, the sales prices for the development have fallen -- and units like the one the Edmonds bought are now being sold for $699,900. The Edmonds are facing the prospect of a $100,000 loss in value before they even walk through the front door.

http://tinyurl.com/c75mr

and pray that they do not lose a job.

When we bought our house in 82 for 82K it was not the house we 'wanted", but one we could afford:cry:

Over the years it has gone up and down...at one time a few years ago, values dropped so much, that had we had to sell then, we would have definitely lost money, but 20+ years later, houses not as nice as ours (same floor plan, same street) are selling for upwards of 300K..

Unfortunately,m we are stuck here until my husband retires. We cannot sell now and then rent, because of our pets, so we will have to sweat it out, and hope that when he retires in 5 years, we will get enough out of it, to buy something outright in a cheaper state :) fingers crossed..bigtime

They bought it 35 years ago, before their area boomed. The area that engulfed them turned out to be about the most desirable place in the city. When they bought their house, land was still cheap, so they bought the lots on both sides of them for a pittance. they paid it off early, and when they sold it last month, their profit, after all expenses, was a few bucks under 600K.

They moved this week to Texas, because his 90 yr old Mom needs him close to her, since her health is pretty bad.

They paid CASH for a fantastic house there and bought two new cars..

Although I miss them already, I can understand why they sold and moved.. Why not? He just retired from the post office, and his wife retired a while back (she has MS), and they both have military pensions.. They are a couple of 60 yr olds, with a bright future:)

Okay, this is Silver Lake, which is a fairly nice area in the heart of the city, but it's not the "good" part of Silver Lake. Also, the house was in very good shape: re-piped, re-roofed and with new electrical wiring, but it's a dinky 1923 house with no front yard and a tiny back yard.

It's nuts. The $499K houses listed are in pretty shabby areas, too.

Sorry. Just watched "Office Space" again.

When I was a kid, we lived in a three-bedroom, two-bath home on a corner lot in Rancho Park. When we moved back east in 1967, we sold that home for around $40,000. Based on the above, it must be worth around $750,000 by now.

This is a small two-bedroom condo in a huge complex. Homeowner association fees are an additional $350.00 a month on top of mortgage payment, property tax, and insurance.

http://realtor.com/FindHome/HomeListing.asp?snum=6&locallnk=yes&frm=byzip&mnbed=0&mnbath=0&mnprice=450000&mxprice=99999999&js=off&pgnum=1&fid=so&mnsqft=&mls=xmls&areaid=91377&typ=1%2C+2%2C+3%2C+4%2C+5%2C+6&poe=realtor&zp=91377&sbint=&vtsort=&sid=05A79A3A9E80C&snumxlid=1050073833&lnksrc=00002

You can forget about a single family home - even a fixer - unless you can afford at least $675K for a 30-year-old dump on a busy street.

It's insane.

By why bother living there when you can't afford it? Seriously, putting oneself in debt for a half million all over a house that would only fetch $50,000 in most of the sane housing markets around the country. That's crazy, and quite frankly such prices should be a sign that it is time for you to move.

For the same price out here in Mid Mo one can pick up a 2400 sq ft house in good condition, complete with outbuildings and aprox 200 acres surrounding it. If you don't want to take care of that amount of land, you can buy a nice palactial place of aprox 20 acres, outbuildings and a 7500 sq foot home.

LA has many many fine attractions, but is it really worth tying up the rest of your life in a house whose value could plummet next week? Rather, move somewhere else and enjoy a new life there. Sure, you might have to put up with some things like less than ideal weather, but I think the trade off would favor you. I know if I were in the same boat, I would leave LA in a heartbeat.