The latest figures have been released and according to the California Association of Realtors, if you want to be able to afford a house in Los Angeles, you need to be making a certain minimum salary. Keep in mind: this is based on an average of houses sold in all of Los Angeles. So, what’s the magic number? In order to buy a house that costs $465,280, you need to make at least $92,571 annually. That’s a pretty hefty salary but don’t let it scare you too much. There are certainly other factors to consider. First of all, this is the median household income so if both adults work, as long as the two salaries equal that 92K number, you are in fine shape. Also, even though the salary number has increased, so have the numbers of households who now qualify to buy. At the end of 2015, 30% of buyers could afford a home but after the first quarter of 2016, 34% could make a purchase. This is good news for the state of our county’s economy! It also shows that real estate continues to be a solid and smart investment.
Of course, the next question begs the answer: where can I find a home for $465,280? The truth is: many places! There are still a lot of houses (and definitely many condominiums) for that price in the greater Los Angeles area. You just need to know where to look, be open to new/undiscovered parts of town and to hire an agent who has his ear to the ground for pocket listings. Good deals are still very much out there even in neighborhoods that would surprise you. But, with that said, it’s also important to keep the 4 percent increase of individuals’ abilities to afford this median house purchase with a grain of salt. Historically, home prices are lower in the first quarter of the year and increase as the year progresses. So, that basically means that more people can afford houses in the first few months of the year but their ability to buy decreases as home prices start to escalate but salaries stay the same.
So, if you are a first time homebuyer in the greater Los Angeles area, now you know the benchmark to determine whether or not 2016 is the year to go for it. Owning a home, especially in the greatest city (in my humble opinion) in the nation is a great goal to have- hoping this is your time to do it. Good luck!