It is no secret that housing prices are on the rise in Southern California, making it increasingly more difficult for individuals to afford to purchase a home and to live in the region. According to recent reports, there may be some good news for those who are interested in buying a home in the area, but the good news is stated with a word of caution just as more mixed-use apartment buildings are slated to be constructed in the region.
Data Shows an Increase in Housing Affordability for the First Quarter
According to the California Association of Realtors, there is some good news for those who are concerned about the affordability of houses in Los Angeles and in the state of California: affordability made a slight gain at the beginning of 2016. In fact, the percentage of households that can afford to purchase a median-priced home in California or in the Los Angeles County increased in the first quarter.
While only 30 percent of households could afford to purchase a median-priced home in California at the end of 2015, that number increased to 34 percent during the first quarter of 2016. Los Angeles County also saw a 4 percent increase from 27 percent to 31 percent during this same period of time. While a 4 percent increase in the number of people who can afford to purchase a median-priced home may not seem significant, a normal percentage bump is typically around just one or two percent.
At the beginning of 2016, the median price of a home in California was $465,280. This means potential homebuyers would have to make at least $92,571 in order to purchase a median-priced home. Within the county, the median price of a home was $458,900, which means a homebuyer would need to make at least $91,302 to qualify to purchase a median-priced home.
Examining Typical Affordability Trends
According to experts, the increased affordability of homes in the state is largely due to higher wages combined with seasonally lower housing prices. In fact, prices typically do experience a drop during the first quarter of a new year. In 2015, for example, the affordability in the state was the same as 2016 at 34 percent. In Los Angeles County, the first quarter of 2015 and the first quarter of 2016 both saw an affordability of 31 percent. Typically, prices tend to rise around the middle of the year.
31-Story Mixed-User Apartments Coming to Area Across From Lafayette Park
A new 31-story mixed-use apartment building is scheduled to be constructed on the corner lot where Wilshire Boulevard and Hoover Street meet in a space located across from Lafayette Park. Developed by Jamison Services and Hankey Group, the building will have 640 apartments situated over a ground-floor commercial space. Residential options will include a mix of studios and one- and two-bedroom apartments. Before the tower can be constructed, a couple of commercial buildings and a parking lot will need to be removed.
If you are interested in learning more about the Southern California real estate market, including market conditions and upcoming apartments and other buildings, contact our team of luxury real estate experts. We specialize in high-end properties in the most exclusive communities in and around Los Angeles.
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(all data current as of 10/17/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.