No surprise here: Los Angeles is still extremely unaffordable.
The City of Angels again ranked as the country’s second least affordable city for prospective homebuyers, according to a report published Monday by the website RealtyHop.
“It’s essentially telling us a story that we’ve been hearing for a while,” said Shane Lee, a data scientist with the company. “People often can’t afford to buy. And especially in Los Angeles.”
A family making the median income would have to spend over 80 percent of it on mortgage payments and property taxes, she said.
RealtyHop publishes a monthly housing affordability index that uses Census data and the site’s own listing figures to rank the 100 most populous American cities by housing affordability. In the just-released September index, the firm’s data found the median asking price of City of Los Angeles homes was $930,000, while the city’s median household income is $62,000. A family earning that amount would have to spend 82.5 percent of it to buy a median-priced home.
“And you also have to think about the down payment,” Lee noted. To come up with that, another study from the company found, the average L.A. homebuyer would have to save for at least 13 years.
New York, with a slightly higher median home price, ranked as even less affordable, with the average family there required to fork over 82.9 percent of income in order to buy a median-priced home.
Miami, where median home prices and incomes are lower, was third least affordable at 82 percent, followed by Newark (72 percent) and San Francisco (66 percent). Detroit, Wichita and Fort Wayne, Indiana ranked as the country’s most affordable of the 100 markets (all were under 20 percent).
L.A.’s median home listing price in August was $940,000. In June, when it was $955,000, the city ranked as the country’s least affordable, and New York ranked a narrow second.
But the slight reduction likely only happened because cheaper properties hit the market, not because home values fell, Lee said.
For months, Southern California’s residential market, particularly its luxury market, has been white hot, fueled by intense buyer demand and constricted supply. A second-quarter sales report showed the region notched multiple sales records, including a $1.75 million median sales price for Los Angeles’ Westside and Downtown, up 15 percent from a year earlier.
Another report this month showed area contract signings had slowed, although appraiser Jonathan Miller told The Real Deal then that the reason was a lack of homes for sale. “It’s not that demand is cooling,” Miller said. “It’s that sales inventory is collapsing.”
Last week the California state Assembly passed a measure that allows for up to four units on most single-family zoned lots throughout the state. The Senate has also passed a version of it. The measure, intended to address the state’s dire affordable housing crisis, could add 700,000 homes, although experts say far more are needed.