From time to time, it’s been suggested here--politely--that young families seriously consider moving east or south to realize the dream of the desirable home, rapidly becoming an unaffordable commodity in Los Angeles.
But there’s no great exodus. While bemoaning and acknowledging the affordability gap, obviously they prefer to stay put and work toward that goal.
They rent and try to save money for the down payment, or if a lender can’t qualify them for a loan, they hope to borrow from the family or friends, and keep striving to buy a home, new or old.
But who really wants to leave these parts? Just consider the seemingly nonstop inmigration and population growth of our city of 3 million plus and a conservatively estimated annual growth rate of more than 1%.
Each announcement from public and private housing organizations indicates the rapid rise in price of the typical home. While the latest national median price of an American home is pegged at $91,300, it’s $122,000 in the West, a staggering $425,000 in Los Angeles and $193,106 in the surrounding area.
While the great spurt of home sales during the last several months is bound to wane soon, some 2 million fewer families were unable to join the ranks of homeowners this year.
“The dwindling supply of affordable housing in this country may spur Congress to enact legislation to mitigate the problem, moving the issue from the discussion stage to center stage,” says Stan Ross, co-managing partner of Kenneth Leventhal & Co., the accounting firm which specializes in real estate. “Any new legislation could set the course of the nation’s housing policies and programs for years to come . . . “
The affordability factor, while pushing aside potential first-time buyers, also affects increasing numbers of middle-income familes, he notes, citing the country’s homeownership rate, which dropped from 65.6% in 1980 to 64% in 1987.
That seemingly tiny 1.6% decline represents about 2 million fewer families pushed out of the market.
Those would include young households in their early 30s whose ability to buy a home fell from 61.1% in 1980 to 53.2% last year.
Costs of homes have reached unaffordable heights for so many young families, making it unlikely that would-be families or persons could soon put together sufficient funds for the scary and hard-to-come-by down payment.
Not only are many new buyers discouraged, so are transferees--when they learn that their home here would have a vastly different “value” than their house elsewhere in the nation. But there is a reverse side to that.
We found a 41-year-old writer who is about to “cash in,” as he calls it, on his good years here and move with his wife and three children to his native western Pennslyvania.
He’ll benefit greatly from his Los Angeles “land and air rights.”
He’s selling his Mt. Washington home, purchased in 1983 for $127,000 with current annual taxes of $1,380, and expects to get $200,000. That solvency will provide him buying power and then some, for a hilltop, view house in a rural area about 20 miles south of Pittsburgh.
He’s buying a four-bedroom house there on a 12-acre site for $128,000 with taxes of about $480 a year. Note the passage of time and the 1983 price for the home he bought here and the price he’ll be paying for the property in Joe Montana and Perry Como country.
We’ll say again, move east or south, y’all.