One of the clearest examples of Los Angeles’ intractable housing crisis can be found on the upper end of the local real estate market. In 2015, the median price of a Westside home surpassed $1 million. It was recently reported that a mansion depicted in TV's Beverly Hillbillies is being listed at a nation-topping $350 million. And now the price of a home at the very middle of the L.A. market is a hair below $610,000, according to listings site Zillow.
In a city where you officially have to be rich just to be able to rent an average two-bedroom apartment, according to a recent report, buying a roof over your head is astronomically out of reach for most Angelenos. And it's getting worse. A new report from Zillow on “$1 Million Neighborhoods” found that Los Angeles and Orange counties have 146 million-dollar communities.
The site defines million-dollar neighborhoods as zip codes where 10 percent or more of listings are priced at $1 million and up. Greater L.A. added 29 of those zip codes since 2014, according to the report. Thirteen have been added since roughly this time last year.
The only metro area with more eye-popping numbers of million-dollar communities was New York, which had 254 total, 53 additions since 2014 and 20 since last year. Even mighty San Francisco, home of tech billionaires, had fewer million-dollar neighborhoods compared with Los Angeles: 125 total, 36 additions since 2014, and six additions since last year.
“The U.S. median home value is just over $200,000, but in San Francisco, Los Angeles and other expensive cities, homes are worth much more,” Zillow chief economist Svenja Gudell said in a statement. “As home values hit seven figures in many neighborhoods, it’s going to have real impacts on affordability for middle-class homeowners whose incomes haven’t kept up, and this imbalance especially has implications for people on fixed incomes whose property taxes are rising along with their home value.”
Indeed. The continued explosion of $1 million–plus homes is bad news for Los Angeles' housing crisis. Even though most Angelenos — whose median individual income is a poverty-adjacent $28,337 — are aiming at real estate much lower down the scale, those high-end listings are a symptom of continued high demand, Zillow spokeswoman Jordyn Lee says.
Prices are so high in Greater L.A. that discount shoppers flood lower-price listings, exacerbating the balance between supply and demand, she says. “There are so few $400,000 homes that you see a very competitive environment, so you have those homes selling over list, and that pushes up the market's prices,” Lee says.
On top of that, incomes for working-class Angelenos have actually declined since the economic boom just before the Great Depression struck in 2007, according to a recent report. “Incomes haven't kept up with home values,” Lee says. “It's a pretty crazy market.”