Home Buying in Los Angeles>Question Details

Gdudjsudi, Home Buyer in ,

How can people afford $700k HOUSES in Los Angeles in 2013?

Asked by Gdudjsudi, , Mon Jan 7, 2013

My husband and I recently moved from Texas and now make in the $200 range combined with no debt. According to the media, we are rich and swimming in cash. But we can't even afford a house in Los Angeles.

We've been house hunting to immense frustration. In Los Angeles, it is impossible to find a house for less than $700k 3bd 2ba. Those we found are 1940s dumps and they have the nerve to list for 750k. Who are they kidding?

How much do the average Los Angeles HOUSE buyer make? What are their occupation? Pls no realtor BS on helping us find a house. We simply want to know how people can afford these post-meltdown 2013 house prices.

Help the community by answering this question:


What is your objective;
Do you just want to vent?
Are you angry that you didn't do some research before you moved?
Do you think that knowing the answers to your questions will solve your problem?

A lot of those residents have owned the house for a long time.
A lot of those people make more than you.
A lot of those people are renting?
A lot of those people are in serious trouble with their mortgages.
A lot of those people have a 2 hour commute to work.

It is, what it is.
3 votes Thank Flag Link Mon Jan 7, 2013
Hi guys, I would like to find a work. I am in Ukraine, and i am Ukrainian 29 years old. In Ukraine average payment is near $200/month. I am design engineer (machinery, small aircraft) my payment is little more (near $500/month it is after taxes). If some will give advice (about work or any) i would be thankful.
Flag Sun Oct 18, 2015
This guy is an agent in Fresno. Completely has no idea about anything, about LA. He's just pointing out the most obvious stuff, in a completely naive and actually defensive way. Get off here!
Flag Tue Apr 7, 2015
@Ron. What an $%#hole answer.
Flag Tue Mar 10, 2015
@Ron....What an ##$$hole answer.
Flag Tue Mar 10, 2015
Precious few realtors understand the magnitude of their responsibility as trusted financial advisors. Most agents, however, entered into the real estate game because it required a nominal education entry fee, while offering flexible schedules and a potential for large lump sum paydays. In short, most people who are in a position to actually afford the exorbitant prices in California are likely much more driven, educated, and intelligent than the 'trusted financial advisor' they are relying upon in their realtor.

The California housing market is a joke, and the high prices are propped up by massive populations of unregistered illegal immigrants who have to live somewhere, a network of realtors who are financially motivated to overprice property, and a faulty valuation scheme that relies soley upon sales of similar properties instead of independent financial analysis that considers foreclosure rates, actual replacement value of property, and land values. When that market tanks...
Flag Sat Feb 14, 2015
yada, yada, yada............... and yet you criticize the OP for a simple query. You are a blowhard.
Flag Tue Jan 27, 2015
Flag Wed Jan 21, 2015
Flag Wed Jan 21, 2015
I agree with WARCH. I read Ron's profile and some of his other posts on here. Being as sharp-minded and good in one's industry, as is Ron, does not mean you're able to simply be kind. I get pleasure from simply making other people happy, even if only for any instant -- I appreciate compassion -- on both the giving and receiving ends. Ron does not seem to be into anything like this. The original poste of this thread has quite a high income so no wonder she's perplexed about having trouble affording LA. It's not Beverly Hills proper! I can see Ron has trouble walking in another's shoes. I'm 60 now, and have come across many of his kind, too many.
Flag Wed Oct 16, 2013
Your reply is a demonstration of the worst of typical male insensitivity and just a plain bad case of foot-in-mouth-itis.
What is YOUR objective here, self-proclaimed VIP? If you don't have any suggestions or recommended solutions perhaps you should at least pretend you have some basic class and courtesy and keep your obnoxiousness silent.
Gdudjsudi's, objective is clearly indicated by the question marks in the original post.
There is nothing profound or particularly helpful about telling someone, "It is what it is"--need constructive feedback on how to MANEUVER AND COPE WITH what it is.
Flag Sun Sep 8, 2013
So we moved from the southeast where we sold our 4000 sq. ft. home for 390, 000 (atlanta). Now living in San Juan Capistrano where we rent a very nice 3/21/2 with a beautiful view for 3000 month. No way we can bring ourselves to buy a 750K home because they are small, unattractive and have no quality of life - tax shelter write-off yes, but how depressing to pull in the driveway every day!

Live 1 mile from the beach, 1 mile from our work, and 1/4 mile from a golf course PLUS if anything goes wrong, call the landlord and go back to sleep. Owned 5 houses, would have never thought i would be a "renter" (losers, right?) but folks, I am here to say...Home ownership is WAY overrated!


Renting and loving it!
2 votes Thank Flag Link Sun Jun 28, 2015
is not the corruption the human being are the worse kind on the universe if you see there are 52 states in the US a bunch idiots want to move in one state when the Gov see that they make you a slave when you get there you stupid only going to work for a stupid house.
Flag Sat Nov 7, 2015
I sure hope you have a good retirement plan. Ain' nothing worse than giving your money to someone else every month without gaining anything except rent hikes and eventual having to move far from where you want to be in order to afford a place when you can't work anymore and are retired. talking 65 and over. Talking trailer in the desert my friend.
Flag Mon Sep 28, 2015
I believe your frustration comes from comparing Texas to California in terms of standard of living. In Texas you van buy a huge and new house with $300k. In the Los Angeles area you are lucky if you find a nicer condo at that price.

Though $200k income takes you a long way in Texas...in Los Angeles it does not in terms of buying a home. Most people in LA bought a long time ago or inherited a large sum to make downpayments...

To get the standard of living you want, you probably need to make double what you are making now or have a $599k downpayment. As crazy as it seems, I represent people buying and selling multimillion dollar houses all cash quite often. All I can say is welcome to LA -What's your dream?

2 votes Thank Flag Link Sun Jan 13, 2013
Buying in Los Angeles really depends on the area. Having family who live in Texas I can understand the price shock and what you get for that price...
Lets just say for the sake of answering your question, a buyer using 3.5% down on a house priced at 700k would be looking at a payment of around 4,100 per month est. To qualify for a loan, this hypothetical buyer would need to bring home at least 10k a month. Other agents may disagree with my math and that's fine, but I guide buyers with a conservative route towards their purchase so that they are not merely working to keep up with payments.
Now I would recommend expanding the area you are looking in. Depending on where you work there are some really great options at that price range that won't leave you feeling like your getting a dump.

Good luck and happy house hunting!
2 votes Thank Flag Link Tue Jan 8, 2013
You don't NEED to buy a 700K house in LA. It sounds like you WANT to live in a 700k house. It's hardly impossible to find a house in LA for less than 700k.

I live in LA (Lake Balboa specifically... ok it's technically Van Nuys, lol). I purchased my first house in 2007/2008ish for 325K. It's a smaller 2BD 1BA and the lot is just under 7000sqft. Our household income is around 150K (32 & 29 years old). We live very comfortably with two dogs, no kids, 2 cars, weekly gardener, cable internet/tv, etc.

Would I like to be able to get a 700K house? Sure. But right now that is above our means. I'm not saying that it's impossible, but we travel a lot, and would lose out on seeing the world.

Our neighborhood is decent. A few of the homeowners have been there for >20 years. Sure, it's not West LA or Santa Monica, but living in the San Fernando Valley isn't bad. We chose to live relatively close to our work, instead of doing a long haul commute and putting miles on the cars.

Occupations - IT Professional & Advertising
1 vote Thank Flag Link Mon May 18, 2015
yeah but that 325 k house would be worth a heck of a lot more now than in 2007, so that is what the OP is having problems with. Current costs.
Flag Sun Jul 19, 2015
I have an offer to move from Dallas, TX to San Francisco (not LA, but that seems irrelevant). I will be paid about $200K in salary and I have been offered 2x that in a bonus if I move. I have another $200K I could put down, meaning a $400K down payment. But as far as I can tell, I would have a commute of over 1 hour just to get a house with 4 bedrooms on a lot that barely fits the house for about $850K. That's a $450K mortgage, for a house that would sell for $150K in Texas. I'm not saying that all 4 bedroom homes in Texas go for $150K. I'm saying that the houses I see listed on Zillow < 850K within an hour of where I'd have to work are such junk that's all you could get for them here.

The sad fact is that the houses in SF / LA aren't worth 1/5th of what they cost in in pure materials, which means either the land is making up the difference (it is more expensive, but lot prices only account for about 1/2 the difference on a house in this range), the construction labor is making up the difference (it isn't... there's almost no new construction), or people in CA are being ripped off on a monumental, criminal scale.

And I absolutely guarantee you that it is the last of those. Go to Zillow and compare the number of blue dots -- foreclosures -- in CA to everywhere else in the nation. It is absolutely astronomical. Why does this continue? Because much of the construction is old, and the demand is high, the banks aren't losing any money. They foreclose on the home owner, they keep all of the interest they made, and they resell. Meanwhile, the agents get a percentage and everyone's happy except the poor sucker who lost his house and who, despite CA's vaunted "quality of life" has to drive 2 hours a day and doesn't have enough room in his backyard to throw a baseball with his kids. That sounds like a really bad deal to me, so, no thanks.

As for property taxes, the guy below from Houston is only telling part of the story. In the Dallas-Fort Worth area you will not find anywhere with property taxes much above 2.5%. Most locales lay between 2% and 2.5%. In Texas in 2014, you can get a house for $500K that is the equivalent of a $1.5 - $3 million dollar house in SF / LA. That will be $12,500 in property taxes. I have been looking for just the right house in Texas for some time, and I see houses all the time here in that price range with taxes between $7000 and $13000, depending on the municipality + county + school zones, so $12.5K is on the high end. No good right? But wait, there's no state income tax. What do you think you'd pay each year in income tax in CA? With a $200K salary, in 2014 you pay 9.3% + $2,191.48, or $20,791.48, you live in a house that is comparatively a dump and have an hour + commute to work in heavy traffic. Heaven forbid you get a bonus and cross the magic $254,250 mark, because CA will take almost the entire bonus in extra taxes up to 10.3% + $21,207.75 ($47,395.50!!)! How do you think it feels to work you butt off, get a bonus as a reward, and realize the STATE government took 94% of it from you? I think the Founding Fathers are rolling over in their graves. To top that off, sales tax in Texas is 8.25% almost everywhere and in CA it's 7.5% up to 9.5%, depending on the municipality. Did I mention that in your house will also be on a minimum of 0.15 acres, up to 1 or more acres, depending on the area you're buying in? Most houses in SF area -- 0.08 acres or less.

And believe me, I know how lucky I am to be making what I am. I grew up very much lower middle class, and $200K a year is a TON of money in most parts of the nation. But when comes to CA and the real estate there, it's marginal.

Besides Texas, I have lived on both coasts and in the Rockies and I am not a fan of TX as far as climate and nature goes, but there are a lot of nice places to live that won't rob you blind like CA.

The short answer -- most people cannot afford houses at the going rate in CA metro areas like LA and SF. The foreclosure rates in CA are in the top 10 in the nation (or top 5 depending on the list) and almost 3 times that of Texas. It won't change until people flee CA for saner pastures. I realize the climate and scenery are a draw, but at the cost of your sanity?
1 vote Thank Flag Link Mon Aug 11, 2014
Excellent points, thats the reality much different from what the Media is advertising!
With my 120k annual salary i'm too embarrassed to even shop for a House,or should i call it a Shed!
Flag Tue Apr 21, 2015
There are no Dick and Jane Home buyers. There are only renters and in those in foreclosure. The people you see buying 700k 900 sq. foot dumpy homes from the 1920’s are Real Estate investors.

In the outlying burbs of LA, you can see the meltdown. New homes going up for 600K, and others around it for sale/foreclosure/repo’d/quick sale for 375k….you know someone is taking a butt kicking. But idiots keep buying!

If you make 200k a year, get a house WAY out and commute. Or, rent.
1 vote Thank Flag Link Sun May 26, 2013
Veronica: Thanks to you an your husband for your service. IMO you deserve a lot better than you are getting. The biggest problem with a free economy coupled with high taxes, is keeping up. There's nothing fair about it, unless a
person thinks everyone being run over and buried indiscriminately is fair.

Most people in CA or any other high cost of living location make it by: living a lower than average standard - spending lots less on everything but food. When they get hit by out of pocket medical bills, they're sunk.

Congress has chosen to ignore this, just like they ignored the problems of the VA, and Medicare fraud.

Why do you think a sane person would run for political office in the USA which
theoretically pays them less than they could make in private jobs? Because they make so much more under the table, and they get a salary, medical, and retirement benefit WE don't get! As corrupted as the system is, I still love this
country, and hope one day you will again too.
Flag Thu Dec 4, 2014
My husband and I have been married for 33 yrs. We both have college educations and we have never made over $70K gross together. Now I am completly disabled and expected to live on $25K a year according to our USA government. We have one daughter and I can only buy clothes at goodwill for myself. We have worked hard our entire lives and always paid our bills and when I got chroically ill with Cardiac problems the medical bills financially bankrupt us with FULL COVERAGE Medical Insurance. The USA has not been very nice to us. Our home is not paid for and will not be until we are dead and gone. When we die the bank will take our home back and every dime invested will go back to the bank leaving NOTHING for our daughter. We are both Gulf War Veterans and I hate this damn country!!!!
Flag Sat Oct 25, 2014
Wow, 200K a year, I could only dream about such an income. I live in the middle of nowhere in South Carolina and my income is around 30k a year. Small houses in SC outside of a city can be bought for as little as $5k to $25k or more. No kidding. Let's revert the globalization back to localization and stop spraying those nasty chemtrails in the sky.
Flag Sun Mar 9, 2014
Wow, 200K a year, I could only dream about such an income. I live in the middle of nowhere in South Carolina and my income is around 30k a year. Small houses in SC outside of a city can be bought for as little as $5k to $25k or more. No kidding. Let's revert the globalization back to localization and stop spraying those nasty chemtrails in the sky.
Flag Sun Mar 9, 2014
Awesome. Great way to put it. I know I want to buy out there someday but I don't expect to be the average family either and it does indeed suck for those average families but that's why areas like Austin and Texas and other areas are getting an influx of new residents, and there are so many Californians there it's not even funny. If you can make it in California or New York you can make it anywhere. This girl describing her childhood and going to school in Santa Barbara, etc., was definitely spoiled and she just now is realizing how nice she had it growing up. Also, though, cities are polarizing and the best are getting better and more exclusive while the worst are turning into ghost towns. You can't make it anymore if you live in a small town and upgrading is too humble of an experience so it definitely helps to have rich parents that can provide guidance and extra funding, which it sounds like she probably has access to anyway. I sadly don't have the luxury of having her problem, yet
Flag Mon Sep 30, 2013
It seems like you do not like the answers and you are shooting the messengers. There is no secret. You want to live in a beach community in California, you gotta be loaded. You do not have money, then maybe you want to try renting (though is still very expensive).

1 vote Thank Flag Link Sun May 26, 2013
No, I didnt mean to come off that way. I'm really just homesick. I've been pretty lucky (or spoiled) growing up in Cerritos, going to school in Santa Barbara, then living in Belmont shore and Scripps Ranch in San Diego. I'm just looking to get home. With bonuses, he make close to 750 and its crazy that we can't afford CA.
Flag Sun May 26, 2013
Okay so all of those agent responses sucked. I am a native CA who has been in VA for 10 years. I desperately want to move home and realize how expensive it will be to go home. I want to ask my friends how they afford it.

In Va our home is on 5 acres, 6000 sq ft home, it's with about 950 now. Our mtg is 3500 and my dh makes over 500k per year. we have 6 kids and 2 dogs . I've lived in San Diego, OC and Santa Barbara. We can't afford to move. I'd love to live in Santa Barbara but a home with no land and 1/3 the size of my current home is 1.4 million. If we move down south, I'd only want to live in Seal Beach, Hermosa...small beach communities.

So, I wish real people with real situations would answer your question as well. Seems as if the only options are to live pay check to pay check or rent. Neither of these options seem viable to me. But who knows I am desperate. And perhaps that is the key... Once you've lived in California, you never want to leave and that makes up for everything else.
1 vote Thank Flag Link Sun May 26, 2013
Lisa, thanks for having the opinion of a rich person. It seems that the problem for the increase in wealth is the increased desire to want what you can't have, which is probably just barely out of your reach but to everyone else it is a dream come true. $500K is nothing to laugh at, especially for a single-earner income. I take it your husband owns his own business or is a high-level executive of some sort?
Flag Mon Sep 30, 2013
Really expensive places like Los Angeles (better parts), Orange County, San Francisco, New York City, Boston and international cities like London, Hong Kong, Tokyo, etc... always have very high percentages of renters. Many upper middle class white collar workers actually rent because it is too expensive to buy. So it will always seem confusing how normal people can afford to buy in these places, because many don't buy. Or the ones that do buy, commit a much larger percentage of their monthly income towards housing then most of the rest of the U.S. Also, although the median income may not be as high as you think, there are more "super high" income earners at the top of the scale in these areas than say the Midwest, South, etc...

Artificially low interest rates, low inventory (due to new restrictive foreclosure policies and cost and difficulty to build new) and prop 13 also keep California home prices artificially propped up higher then they should be.
1 vote Thank Flag Link Sun May 26, 2013
I feel your pain, and I have lived in the LA County my entire life (I’m 44). My husband and I just sold my old townhome and it’s a great market to sell right now. But we want to take this money and buy a single family residence in the 1800 to 2000 sq ft range in a nice part of the San Gabriel Valley with a sale price max of $775k (we plan to rent out our current townhouse because we can’t sell it since we’re still upside down on it). However, the homes that we are seeing right now in this price range do not meet our standards. I think we will sit on our $230k to $250k down payment for much of this year to see if things become more reasonable because these prices seem commensurate to what prices were at the height of the housing bubble a few years ago. I don’t want to get caught up in that frenzy and make another bad decision.

I see that the responses you got all came from realtors and I was hoping to see more feedback from real buyers. I’m afraid there wasn’t anything very useful in the feedback I saw. But don’t let the negativity from some accusing you of not doing your homework affect you. This market has changed drastically within the past few months and even professional realtors are surprised by this hot market. And I’m sure you already knew ahead of time that the standard of living in Southern California is vastly different than Texas before you moved. I wish us both luck in home buying search!
1 vote Thank Flag Link Fri Mar 1, 2013
move an hour away from los angeles to victorville,riverside ,palmdale am sure you will find a 3500 sq feet home in any of those cities for about 250k ,call me I will email you a list of properties .

Melvin Castro
310 930 6572
1 vote Thank Flag Link Mon Jan 7, 2013
I totally agree with you! Unfortunately, as California and the Los Angeles area is an overpopulated yet popular area due to proximity to jobs, closeness to Hollywood, the ocean, entertainment, and the general weather here in California, many homes go for much more than they do in other parts of the country. I am from the midwest so I understand what you are saying. I could buy a much larger home in Indiana - near the Lake, for a fraction of what would be spent out here for a smaller home.

As far how much the average home buyer in L.A. makes and their occupations - I would have to Google that but much of the higher end jobs are executives, self employed, film related - whether it is acting, production, etc and technology jobs - from website/internet design to game creation as well as Government contract for engineers for military equipment etc. Granted, this is just a rough summary but it gives an idea.

If you are currently living in the immediate Los Angeles area you may want to consider looking into San Fernando Valley area. You will have to contend with the commute, but you may be able to find a more affordable home that can suit your needs. In actuality, your combined income and lack of debt puts you high above most California residents. It is a very different lifestyle here and way of thinking in regards to money compared to most of the U.S. I'm still getting used to it after 20 years.
1 vote Thank Flag Link Mon Jan 7, 2013
off set hosue payment with rental we have 2 family (that I own) in pasadena. great schools, totally updated
buy the house ~ 900k and rent the guest house which goes for 2200 with todays interest rate that makes affordable

matthew duffield 248.778.7072
0 votes Thank Flag Link Fri Nov 20, 2015
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0 votes Thank Flag Link Thu Nov 19, 2015
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Flag Thu Nov 19, 2015
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0 votes Thank Flag Link Fri Nov 6, 2015
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0 votes Thank Flag Link Tue Nov 3, 2015
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0 votes Thank Flag Link Sun Nov 1, 2015
Lets pretend that I won the Lottery recently and say I won $89 MIL and want to purchase a beach house in either The Strand, Manhattan, Long Beach, etc. My top budget for a home would be $14 MIL, how much would I have to pay out in taxes every year?

0 votes Thank Flag Link Mon Sep 7, 2015
Do you know that a small house can be built for $200 k? Do you know that it is possible that we are nearing another real estate bubble, just like in 2007-8? As people realize they will never afford the house, they tend to declare and walk away. There are empty properties in forclosure, being held back so the market is not flooded. As there are less available of anything, people tend to be willing to pay more for what's left. Don't be a sucker. We are going into a major election in 2016. Things will change. Just an FYI. I'm waiting. Good time to sell, maybe. Not a good time to buy.
0 votes Thank Flag Link Fri Jun 5, 2015
As a Los Angeles native who has no ability to afford a house of any kind, but would like to someday, I can point to a couple of things that I've seen concerning the LA housing market:

1) I don't know anybody under the age of 30 who owns a home. (I don't run in highly paid circles for the most part, but I come into contact with a lot of people, with varying degrees of wealth.) This speaks not only to the high prices, but the need for a very large down-payment that is difficult to amass while in the early phases of a career.

2) Most people rent because land prices are ridiculous.

3) While the extremely wealthy can afford to buy, pay off and keep their homes, most look at home buying as an opt out for rent. You buy a home, pay down the mortgage while you live there, sell it and move somewhere else. It's not really home "Ownership" so much as an investment, and paying rent that you might see returned down the line. Most people aren't really buying a home expecting to sink the entire list price into it and then pass it on to their kids... (That used to be the case, but not in the last 15 years as far as I can tell...)

4) Those that are buying now, and are not in the "Super-rich" category, that want to keep the house (again, not the majority of buyers) are doing so with the expectation that retirement will come much later than for most in other areas of the country. i.e. they will be paying off the house for looooong time.

This means, people in your position will typically "buy" an $800,000- $1 million home to live in and pay down for a few years to a decade, with the expectation that they will then sell it off for something approaching the price paid for it ostensibly having lived for relatively cheap as compared to paying rent that just goes down a hole. I'm not saying that that is a good policy, or a smart one, or even the way home buying should work. I don't know, and it's far out of my reach anyway, but that seems to be the understanding that people are operating under as far as I've seen.

Hope that helps!
0 votes Thank Flag Link Thu May 7, 2015
It's even worse in San Diego! If you plan to retire here, you will have a hard time. We have been here for 8 years and have to work full-time (after retiring from GE 10 years ago) just to afford a $1500 2-bedroom, 1 bath, no airconditioned home in a decent neighborhood. And our landlord keeps threatening to raise our rent "because the property values are going up". We are only here because we want to be near our grandchildren, but when they are older, we're outta here. The "perfect" climate is definitely not worth it. I'd rather have some autumn leaves and a little snow once in awhile and live in a smaller town where houses are worth their prices. Good luck with your hunt.
0 votes Thank Flag Link Mon Mar 2, 2015
If you make 200k combined and have little debt then you should be able to afford a $1 million dollar loan. This million dollar loan would require at least 10% down payment and the loan would not have mortgage insurance at my bank.
Many young professionals in LA, SF and other expensive cities across California and the rest of the USA are working with me at Wells Fargo as there aren't many lenders that will do a mortgage loan up to 90% of the value of the house without mortgage insurance or PMI. Rates are in the mid 4's on this loan.
If you'd like the lowest rate on a 30 year fixed mortgage then 20% down would be best and you can go above the million dollar loan threshold as well.

If you are serious about buying then feel free to contact me via phone or text at 858-805-5347 and I can get you pre-approved for these special Jumbo loans.

Happy Holidays-
Bryan Horn
0 votes Thank Flag Link Fri Dec 26, 2014
by 700k Dollar and a good agent or realtor.
0 votes Thank Flag Link Sun Nov 30, 2014
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0 votes Thank Flag Link Wed Nov 26, 2014
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0 votes Thank Flag Link Wed Nov 26, 2014
I can't help you with Los Angeles area but I can offer you beautiful home with 4 bathrooms, individual air conditioning and heating, in the 4 upstiars bedrooms and central a/c & heating in the 3 downstairs bedrooms the huge living room, formal dining room and the sun room. There is also a beautiful breakfast room, great kitchen and huge basement with side mounted closets and huge shelves, a drafting desk and more. There is also a cottage with its own bedroom, bathroom and kitchen. The house is in the most desirable county in Northern California. It can give you a nice income after all expenses are paid and is about half an hour from San Francisco. You can walk to the local University (3 blocks), three best supermarkets (2 blocks), bus-depot (2 blocks) and downtown (3 blocks). When the new electric train is completed you can also spend week-ends in the wine country without using your car. The train station is about three blocks away. This is a real offer. I have been living here for the past ten years but am now 80 years old and want to get a smaller studio where I can write and do my art work without running a beautiful but large home. Let me know if a wonderful new life near San Francisco sounds interesting to you.
0 votes Thank Flag Link Sun Aug 24, 2014
Where are you looking? $200k a year is easily enough to buy a home, assuming your not looking to buy a huge sprawling estate.
Let me know if you need help, have questions, or want to start looking :) I love working with out of state clients! :)
0 votes Thank Flag Link Tue Aug 12, 2014
This question posted Jan 2013.
...sudi has solved the situation in 18 months.

But for other readers in a similar situation.....

You have many options.
Just this week a buyer, voicing a similar situation, but actually seeking a solution, did find a house that they did buy The house was presented right here on Trulia and the buyer was secured via the First Look option. Now if this buyer does not appreciate the advantage presented to them, and goes goofy, they will be dealt out and the next buyer will replace them As many buyers are finding out, the good stuff has no shortage of buyers, sells in nano seconds. IN such markets a buyer needs an advantage. Those advantages are created for them.

What should buyers do.
Drop the attitude.
"No Realtor BS" does not suggest a buyer are open to alternative buying methods therefore a professional should not waste a second of time in helping them. In the end such an attitude promises the buyer will look for others to blame for bad choices they make. (low ball offers, stuffed with contingencies, extended close date, big bank paper)

Face it, a buyer going to need to meet up with a few professionals, (sorry, not BS) to review their situation and the buyer situation will dictate the options that will prove successful. One such outcome is the buyer may need to adjust their expectations. No BS.

Here is additional 'No BS," that may prove useful. This IS a business, not a hobby. If a buyer is serious, they will do what serious folks do, contact professionals. There are solutions. Unfortunately, they are not FREE. We need to keep our light on too.

$200,000 income, little debt, no blemishes, there are solutions.
NO BS, those who successfully help buyers and sellers dozens of times every year just might have solutions you don't know about and won't be made public.
0 votes Thank Flag Link Sun Aug 3, 2014
If you have no debt and make 200k a year, why can't you buy a home for 750k?? Unless your lender is giving you an insane interest rate (which I doubt)
maybe its more of a culture shock of the differences in prices between the two states? Depending on what part of la you have to commute to, id suggest looking in Ventura county there's some very nice homes and will likely get the newer look youre interested in
0 votes Thank Flag Link Sun Aug 3, 2014
There's certainly an element of shock to it. It's the kind of shock one might feel upon waking up in an alley with a cranial contusion and no wallet. The point is that $750K in CA buys an absolute dump of a house by the standards of everywhere else in the nation, at many times the price, worse taxes burdens, horrible commute times (8% of your life in the car), and the stress of a high mortgage payment.
Flag Mon Aug 11, 2014
Purchasing an REO Forclosed or Short Sale property and making necessary repairs/updates gives you INSTANT EQUITY as often mentioned on HGTV's Property Brothers cable broadcast. That equity then affords you the means to obtain either a HELOC or other home improvement loan/grant to complete the phased updates. This is an option many are using.

Some also are doing much of rehab themselves. Never hurts to learn how to wield a nail gun or remove some unwanted, old tile! Think: "Money Saved equals More Money for Updates!"
0 votes Thank Flag Link Tue Jul 22, 2014
Gdudjsudi: I totally HAVE felt the same about L.A. region ever since living there back in the 80's! The prices though have escalated WORLDWIDE for the very reason Brad Korbel stated, Supply & Demand [+ Appraisal Mark-ups - a practice corrected by the Fed. God's & the AIA but the damage was never obliterated. Prices were allowed to be set based upon those High, False Appraisals by Sellers & Brokers & R.E. Agents regardless. Thus enabling them a higher profit. This imbalance has never been corrected. And as Michael Douglas stated in movie 'Wall Street', "Why,....for no better reason other than GREED! Yes, Greed, the cornerstone of Capitalism."].
Enabling Factors for the Continued Practice of Overpriced Housing:
Density of Populace
(willing/able to pay) plus
The % of New Housing as compared to Existing Housing. Homebuilder's were hit hard in last economic downturn and had to literally under price too much inventory properties to pay their bills. This created a higher desire for existing housing and spurred the current rehab craze as many felt there best chance of homeownership laid in rehabbing the "THEN" throng of foreclosure & REO properties. But R.E. Investors also saw 'GOLD' and jumped in to snatched up what they could causing an even greater price increase scenario which the gov't. soon put a cap limit on that activity. BUT AGAIN, the damage to the market was already done ....... and price increases were left 'AS-IS', to borrow a r.e. term!
So those enabling factors were all contributors.

Now how do they afford such prices:
As 'House Hunters' Cable Broadcast shows it is majority demographic of:

Caucausians and very few minorities

Ages 23-55

IIncomes from $ 35K - $80 a yr.
(Of course, some donated monies from parents for young newlyweds and older children is often seen as well.)

Employment Status: Individuals with 'in-place' Telecommuting positions or Self-Employed positions. And many job relocation's or job offers are seen on HGTV's House Hunters broadcast's.

And either young newlyweds/adventure-seekers/retirees
Families with 2-4 young children not yet college age.

Rarely seen:
Families forced into foreclosure due to job loss and moving overseas to live good at much cheaper cost as an Ex-Patriate.......which there are multitudes choosing this option of living overseas or on a private island.

Primarily, many are funding via retirement funding investments, higher EXPECTED wages promised by new employers, or family donations (if needed). Majority: Retirement & Investment Funds.

I only hope ALL THIS just gives you a far better of what you're truly dealing with.

Best Option for Many:
As 'Property Brothers' broadcast shows:
You can get a foreclosed/REO/Short Sale property and make 'Phased Updates/Repairs' on your affordable timeline.

Again, just trying to help you see entire picture and best avenue.

Wishing you.& yours the VERY, VERY BEST!
0 votes Thank Flag Link Tue Jul 22, 2014
I am a realtor in Santa Monica but no BS. Are you financing your new home purchase? If so you want to pick a few different loan brokers or bank officers to give you quotes. Shopping around for your loan is most important. You may be able to get a loan for more that 700k.
Other than that, have you thought about looking for a townhouse? You would be able to get more for your money, and town homes are most similar to single family residences, but generally cost less.



0 votes Thank Flag Link Thu May 29, 2014
Depending on the area , there are a lot of homes for sale , in L.A. it is all supply & demand ,many people come to L.A. from all over the world . why do people pay more money for designer cloths,supply & demand .Good Luck !
0 votes Thank Flag Link Sat Apr 5, 2014
thanks, brad -- loving the glib, trite platitudes on the home market! hey -- socal agents are in WAYYY oversupply, so yeah... supply/demand.... makes sense! see ya! can't wait to squeeze you guys down to .5% commissions, or... just use redfin or FSBO
Flag Thu Aug 27, 2015
Homeowner in outer LA area.
Here are the major reasons:
1) adjustable rate mortgages allow buyers to cut their payments by 1/3 or more (they will be sorry later when their payment resets).
2) 25% of properties have been bought by investors who hope to make a quick profit. They are asking for 20% or more over what they paid despite only owning the place for a year or less.
3) Many people bought these properties in the 80s and early 90s when prices were more reasonable. Now prices are ridiculous.
4) There are a lot of high income earners in LA.
5) Many inherited money or were given money for a large down payment by their parents.
0 votes Thank Flag Link Wed Apr 2, 2014
So I moved back to Houston from LA about 2 years ago. I've asked myself the same question about people living in expensive homes in LA. We drove through this neighborhood last week while visiting and it blew my mind at how much the homes were and how many people were actually living in them. Here's something that they don't tell you when you pack up and move to TX. First we don't have an income tax... yaay. But where does that tax revenue come from? You guessed it... property tax! Let's look at a $300k home. In CA your total mortgage with taxes would be about $1775 assuming the interest rate is 4.25% and the property taxes are 1.25%. Now that same home in a MUD neighborhood outside the Houston metro area would cost about $2475 with property taxes as high as 4% (and even higher) in some areas. Now let's go apples for apples. For $2475 I could own a home in LA that cost $420000. This roughly buys $120k more for the same monthly payment. And if you are blessed enough to be employed in LA, the cost of living adjustments make purchasing a home more feasible. For instance, I took a comparable job when moving from Texas and was paid $27k more. When I moved back I was paid significantly less. Finally moving in the city has become very expensive out here. Our school district is not the best in Houston so people like moving outwards while eating the high taxes. If you are not concerned with schools and move to the inner-loop areas of Houston, expect to pay LA prices at 2.7% tax!!!
0 votes Thank Flag Link Mon Dec 30, 2013
It depends on your tax bracket. If it's high enough to actually purchase a home > 1000 sq ft, you will almost certainly pay more in CA income tax than you would pay in property tax in Texas. At $200K, you're paying just under $21K to CA. To pay $21K in property taxes in Texas you would have a approximately a $1 million home. In Texas, that would be a 6000 + sq feet home with the build out of a mansion, a swimming pool and maybe even your own tennis court.
Flag Mon Aug 11, 2014
And I have one more point to make... as your property value goes up... so do the taxes. So what do you think is happening to those people that live in the older neighborhoods and these investors start building million dollar homes. Once again, you guessed it. The older homes spike in value and people can pay the property taxes. I think in LA you are only taxed on the original value at purchase for the life of residence. Makes you think twice about LA.
Flag Mon Dec 30, 2013
Dear Gdudjsudi,

Many families have two income earners which helps with the mortgage payments. The down payment can be a gift from the family of the buyers.
I realize it must be very upsetting coming from an area such as Texas when you see what your money will purchase here. If you research this, many major cities are very expensive, San Francisco, New York and others.
Some buyers will move to suburb areas where housing is less expensive. There are some lovely homes in Valencia and Santa Clarita and they are in the 400's for a new home.
There are some areas that are more reasonable then others. You need a really good Realtor to assist you.
0 votes Thank Flag Link Sun Jun 9, 2013
Multi Family is in the millions
Flag Tue Dec 31, 2013
Wondering how many any multi-unit properties are for sale at any one time at a rail station in nice area in the LA or San Diego area. I would need at least 3 units with zoning to allow building additional units. What is the range of rent prices for such a property?
Flag Wed Oct 16, 2013
Hello, I have lived in los angeles all my life. My sister moved to texas last year and bragged to me about the mansion she could get for the price of a condo in la. However I just want to set the record straight about LA prices so your not convinced by all the Realtors lying to you on here. First, they really only have shot up since the 80s. Once massive migrations of people began to come to canifornia, not just from the usa mind you, from all over the world. La became an international market in the 80s and since then you now must buy again people in asia, europe and the middle east as well. La WAS effected by the crash in 2008 (my house dropped 65%) and the crash in the early 90s and before that in the early 80s (so dont be fooled). The trick is, to buy what you can afford, to hell with expectations.
0 votes Thank Flag Link Fri Jun 7, 2013
The answer is: They can’t. A bank can always get you into a loan. And to be honest, nothing has really changed since the housing bubble out here. We were looking for a house in Santa Clarita, an area with median home price ranges in the 500’s. In new build communities, we counted over 10 houses up for sale in the first year alone out of a 45 house track. Why? Because people got into a mess they couldn’t afford. Once the builder sells, they don’t care! And the bank can sell and resell homes all day. Would a bank do anything that wasn’t profitable?

On a home in the upper 400’s, after taxes, insurance, HOA fees, possible school bonds, etc., look at above 4K a month for a home…I don’t know what the Relator below is smoking saying 4100 will pay for a 700K home! LOL.

Rent a small crappy apt. or get ready for a LONG commute out from a crime ridden city if you want to buy a home and actually keep it. LA is insane. 100K here has the buying power of 29.5K in Texas. Welcome to the intro level pay scale in the land of fruit and nuts.

However, on the bright side, post melt-down prices never touched LA. So, if you do buy a 750K 1906 home, you will get your return on investment….that is….if you can keep it!
0 votes Thank Flag Link Sun May 26, 2013
I know how you feel. I lived in Alief, Houston area, San Antonio, & Del Rio. Sticker shock as far as housing prices here in LA!

There are some options in the Greater LA area. Which part of town are you wanting to buy in?

Once, you let us know where you're interested in buying, a realtor that specializes in that area is your best option.

For example, I specialize in the Westside, Pacific Palisades, Santa Monica, Brentwood, Westwood, Venice, Marina Del Rey, Playa del Rey! & Westchester.

Although, I'm familiar with some other areas, because I've been an investor for 12 years.

Douglas Lagos
Realtor®, Certified HAFA Specialist (CHS)
DRE# 01921046
Coldwell Banker Residential
Tel. (310) 463-8088 http://www.douglaslagos.com
0 votes Thank Flag Link Mon Jan 14, 2013
Seems lIke many people are able to afford and would like to buy properties in Los Angeles area at a present prices.

It also looks like prices are increasing, there for - right now is pretty good time to buy.

I'm not sure about Texas, however there are different cities and counties close to Los Angeles where you can purchase property for less than Los Angeles - for example San Bernardino county, Riverside county, Kern county, etc...

There you have some options - and if you need to buy closer to LA you may consider San Fernando Valley, San Gabriel Valley, and other cities where I can locate properties for you at a lower price.

Hope this info will help you!

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0 votes Thank Flag Link Mon Jan 7, 2013
Coming from Texas, sticker shock is to be expected...In fact, I've seen this reaction whenever folks come to California from less expensive states.

While this is clearly a tough transition right now, I can tell you that 5-10 years down the road, it will seem easier for you. Salaries tend to be higher in California and unfortunately, so is the cost of living.

For now, you may have to rent, or live in a much smaller home than you had dreamed of. Hopefully, you moved to LA for some really good reason, and will have opportunities to move up in your housing at some point.
0 votes Thank Flag Link Mon Jan 7, 2013
The land is often at least 2/3 of the value of a property in Los Angeles proper so the closer you are to mid city areas the higher the price just for the land. Since these areas were developed first the houses are older - some have been redone but others not. It is a very competitive market right now so if you want something newer and bigger you will probably have to go out towards the suburbs a little.

I grew up in midtown but live in the San Fernando Valley now and love it. Less traffic, less congestion, some breathing space.

You are going to have to pay market price wherever you choose so decide what factors are most important, how much remodeling you are willing to do and look there.
0 votes Thank Flag Link Mon Jan 7, 2013
If you're making $200K, then you already know it's very easy for people to earn enough to pay $700K on an entry level home. It's the breadth of opportunities that has drawn so many to California and the prices reflect that.

The sellers aren't kidding anybody with the asking prices. They're asking that much because that's what the market will deliver. Sellers aren't all randomly putting up crazy prices that won't result in a sale.

The average buyer in your price range makes $150K a year. There are tens of thousands of jobs like that. Since prices have come down from the peaks, homes are now more affordable and people are buying.
0 votes Thank Flag Link Mon Jan 7, 2013
Median home prices are less than $700K in the city of Los Angeles. There are many wonderful neighborhoods throughout the city with character homes in your price range. You may have to go outside of your comfort zone and explore the city a little bit more. Los Angeles real estate market offers something for everyone.
0 votes Thank Flag Link Mon Jan 7, 2013
$700K is a lot of money to pay for a home in almost any market. Los Angeles, however, is a market of over $10 Million people, so the top 5-10% of LA residents are the business owners, C-Level execs, entertainers, athletes, high producing sales reps, and other wealthy individuals who can easily afford homes in the $700,000 range and up. The median home price in LA County is ~$400,000 and the median household income is around $60,000 so you are still far above average @ $200,000 per year.

Texas (even in Dallas, Houston, Austin. San Antonio, etc.) is notorious for low home prices, but the property taxes are extremely high.
0 votes Thank Flag Link Mon Jan 7, 2013
High producing sales reps LOL, yeah sales people definitely don't fit into the "wealthy" individuals group. Try engineers, doctors, big law firm attorneys and yes some business owners etc. It made me laugh when you thru sales people into the mix. Non professionals rarely fit into a "wealthy" category that has any kind of objectivity,.
Flag Sat Aug 1, 2015
A large down payment helps to reduce your loan.
But in the the end, moving to LA is a wallet shock, especially from Texas where housing is so inexpensive in general. You have to stretch yourself, over time it eases and you get used to it.
I lived in Minnesota for 2o years/ I sold a 4 bedroom, 2,300 SF house totally remodeled and updated for $425,000. I came to LA and ended up buying a 1,500 SF fixer upper for $500,000! Those are just the realities.
I too don't understand how $250K a year can be considered rich here.
0 votes Thank Flag Link Mon Jan 7, 2013
Well, it really matters what part of LA you are looking at. In the valley, in Granada Hills (what I like to call the Beverly Hills of the Valley), you can find a nice 5 bedroom house, large with a pool for around $500k. Average price of homes in the valley are well below $400k total. Most of these homes are built in the 80s and 90s, but some of the higher end homes are built after the 94 earthquake so you have more modern choices. Most people buying above $700k are putting large amounts in down payment, that's why they can afford home loans.

If you want to speak with a qualified loan officer about your loan needs, I can recommend Bridgette at WestCom Lending (818) 335-0283 / bridgette4re@yahoo.com

All in all, location is key in finding a home that is for you. Maybe try searching a slight further commute to work to have the luxury home you want. Any questions, feel free to contact me.

Caroline Harabedian
RE-Search Concept
8700 Reseda Blvd., Suite 213-B
Northridge, California 91324
(818) 967-9626 mobile
(818) 979-0226 fax
0 votes Thank Flag Link Mon Jan 7, 2013
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