Los Angeles prices are running scaringly high. They’re approaching the cliff’s edge, in fact, according to the Joint Center for Housing Studies (JCHS) of Harvard University that recently showed that in Los Angeles almost 60 percent of renters spent the majority of their income straining to get a roof over their heads.
The Joint Center for Housing Studies showed that about 58.5 percent of the renters from Los Angeles/Orange County (LA/OC) metro areas use more than 30 percent of their income for rent and skimp on other necessities such as food and healthcare. A huge amount of the population are “burdened”, and as much as 32.8 percent of renters are “severely burdened”. Those who fall into that category consume over 50 percent of their income for rent’s payment. Los Angeles, the JCHS reported, has become the 22nd least affordable city in the country. It has also become the place with one of the largest levels of homelessness largely because too many renters fail to pay their rent.
But that’s not to say that millennials can’t scrape out their corner there. In fact, Los Angeles, in general, and Downtown Los Angeles, in particular, are hubs of baby boomers. Research shows that baby boomers gravitate towards work/live/ play environments and LA has all of that.
According to a map from JLL that tracks millennials and baby boomers, Downtown Los Angeles outnumbers baby boomers by 10% in a consumer market.
So if you’re a millennial who lives in LA and are seeking housing in that ‘City of the Angels’, here’s what’s available for you.
Housing options for millenials in LA of 2016
If you’re a millennial or have a kid who’s one, you may be making quite a bit of money (which doesn’t mean all millennials are rich). You’re still unlikely to afford a home in LA. No surprise. LA is one of the most difficult places to stake decent home to in all of California. In all of the USA. Throughout the world!
California’s reputation is such that the media talks about an “affordability crisis” that is brewing in the Golden State. Realty reports document that the California home premium – the difference between California median house prices and U.S. house price medians – doubled in the last four years, from $126,000 in 2011 to $255,000 at present moment. And prices in LA rank towards the top.
Millennials are the self-talking ’90s who supposedly like to get their own way and otherwise have scores of Twitter followers and fans on Facebook who like their posts. Unfortunately, this doesn’t convert into buying a nest in today’s real estate market of LA.
Here are the properties that SmartAsset says millenials living in L.A. can buy
SmartAsset.com has gathered recent US Census data on the median incomes of millennials in Los Angeles in order to calculate the average housing price that would be affordable to the under-35 set. Here’s what they found:
The average Los Angeles millennial earns $33,667. This means that our average L.A. millennial can afford to spend $111,000 on buying a home in the region, or consider a maximum monthly mortgage payment of $1,010.
But here’s the problem: By saying that millenials are able to afford a $111,000 home, this is another way of saying that L.A millennials cannot afford a home. The median housing price in L.A is about $575,000, so unless young homebuyers get a sizable loan from their parents, the housing market is off-limits to them. They can always pluck a nice vacant lot in the hope that their nation’s future administration will be wealthy and kind enough to lower housing prices or intends to keep the economy stable when that generation graduates. But a home for themselves at just a shade over $100k? Not likely.
Millenials are resourceful. Here are some ideas that can help you.
The vacant lot plan may be not be for you nor the mansion of Kim Kardashian or the sprawling plains of Oprah but how about this… A 5,070 square foot, vertical beauty that is perched on the edge of Laurel Canyon Boulevard in the Hollywood Hills. It is a perfect setting of rustic beauty. You can dig out some nice flat land near the cliff for a tent or maybe a Viking mobile home. And find some way to charge your cell.
Failing that, you can get a one bedroom-one bathroom condominium in Beverly Hills. Sounds great, right? Only 230-square feet. It used to be a cook’s location. But no matter. Its $55.000. Cheap! And after all in Beverly Hills. Not far from Miley Cyrus…
But it’s the home that you dream of. You want the backyard. And where will your kids sleep? Scrunched up together on roof?
OK… so there’s the 620 sq. foot cabin for an amazing just under $111,000 that’s located on leased forest land near Azusa. Looks beautiful especially as the cabin’s listing promises that homeowners will be in the clear until at least 2028, and if the lease ever does get terminated, the Forest Service will buy back the cabin at fair market price!
Sorry to tell you, it seems as though millennials are destined to lodge between a rock and ocean or rather between a mobile home and a one-bedroom cabin. Want to live somewhere decent in L.A without killing yourself? You may run into torments.
Alternatively, you can seek out commercial hard money lenders for a loan. With no credit investigation, fast money, and convenient, smooth processing – they may be able to suit your needs.
Watch out for the high interest rates and accompanying risk that they may seize your property would you default.
Given today’s LA housing situation, you may have few other options.