If you think the home buying scene in Los Angeles is nuts, as in mid-'00s nuts, you're right. Those all-cash buyers and real estate investment trusts hovering over the newest for-sale signs have ruined it for middle-class house shoppers with only minimal down payments and loans in-hand.
And that's not good for the economy. The California Association of Realtors this week unleashed its “affordability report” (via Curbed LA) for the second quarter of 2013:
The report says that, in the Los Angeles market, it now takes a buyer with a household income of $73,210 to even begin to get her hands on a median-priced ($380,890 ) home.
Statewide that number is higher: It takes a $79,910 annual income to get at a median-priced, $415,770 home.
The median family income in California in 2010, according to the Public Policy Institute of California, was $61,100.
According to a New York Times analysis, taking home $70,000 a year puts you in the top fifth of income earners in the entire United States.
You get where this is going: If you're in the middle, you can't afford a house. Period.
And so, do you know how many of us could afford a median priced home in California? Only slightly more than one in three (36 percent), says the California Association of Realtors.
That's a sad thing. We hope you like your apartment. You might be living there for years.