Home Price Differential

In response to “Home Sick” by Rhonda Bright (Aug. 26) and rebuttals in “Letters,” there is no doubt that real estate prices are abnormally high in Southern California. Recent figures on home affordability in Los Angeles, Orange and San Diego counties indicate that only 15%, 14% and 19% of all people living in those counties can afford to buy the median-priced house.

The median home price in Los Angeles County is approximately $215,000; Orange County, $234,000; and San Diego County, $186,000. The median home price nationwide is $96,000.

In 1970, the median sales price of a home in California was $24,300, and nationwide, $23,000. California and nationwide home price averages stayed fairly close together until the late 1970s.

Even with that hyperinflation in the late 1970s, according to the California Assn. of Realtors, 46% of people could afford a California home in 1977, and in the same year, the figure was 57% nationwide. By 1988, only 26% of people could afford to buy the typical California home, while 48% were able to purchase a home at the national average.

Only recently has the pace of inflation in residential real estate in California begun to slow, following a national trend.

There is no housing shortage in Southern California. There is an affordable housing shortage. The fact is simple: most people who haven’t been owning a home in California for the past 15 or 20 years are priced out of the market. Ah, yes, most of these are part of the younger generation.

What it comes down to is that California, with Southern California in particular, is beginning to lose out on business activity because of high housing costs.

This current slowdown in sales of homes and drop in home prices has been long-awaited by many. Hopefully, it will continue for at least 10 years. It appears that it will take quite a long period of time until homes will start selling a little bit more.

JASON BURGER

Gardena