HOUSE HUNTING IN SOUTHERN CALIFORNIA – The Real Estate Market has gone crazy!
Buying a home can be a difficult task in Southern California and elsewhere, with prices at an all-time high and still rising. You may have to put your entire life savings into a single purchase.
For many buyers, particularly those who have never owned property before, pricing isn’t the only stumbling block standing in the way of a purchase. There are also questions of where to start looking, what price range to consider, and how to obtain a loan. Today we’ll focus on Southern California.
How much do homes cost in LA?
According to real estate tracker CoreLogic, Los Angeles County’s median price was $650,000 for a single-family home and $530,000 for a condo in November.
The median sale price includes starter homes and smaller residences meant for one or two occupants, meaning it may actually understate the priciness of the LA market. The median asking price per-square-foot was $440 in November, meaning that a typical single-family home of around 2,000 square feet could be expected to retail for about $880,000.
But prices are very neighborhood dependent. In some parts of LA, that amount of money could go much further; in others, you’d be lucky to get a tiny bungalow.
Why is it so expensive?
The cost of buying has been steadily rising, and homes are now pricier than they were even in the housing bubble years leading up to the Great Recession. Real estate experts blame a variety of factors for LA’s high home prices, including the area’s persistent desirability among well-heeled buyers and a dearth of new construction to satisfy buyer demand.
What kinds of homes can I buy in LA?
Los Angeles is famous for its picturesque single-family residences (from Spanish-style to midcentury modern), but those aren’t the only types of home available. As local leaders focus on developing dense housing around transit, the city’s housing types could grow even more diverse.
Single-family homes: Your classic American-style house that sits by itself on its own plot of land (white picket fence and swimming pool optional).
Duplexes/triplexes: A property with more than one self-contained unit (each with its own kitchen and bathroom). These are often snapped up by investors, but can be good options for buyers purchasing homes with extended family in mind—or those planning to take on a renter to help pay the mortgage.
Condos: Condos are basically apartments that you can buy instead of lease. Unlike single-family homes, a condo building and the land beneath it are co-owned by everyone in the complex who has purchased a unit.
Amenities and upkeep in a condo complex are paid for by a homeowner’s association, which is funded through monthly fees paid by residents. Single-family homeowners don’t have to pay these fees—but they are also shoulder any home maintenance costs themselves, rather than dividing them up with neighbors.
Townhomes: Generally attached to neighboring units, these offer the space and feel of single-family homes, but they function more like condos. Residents share ownership of the land around the homes and pay monthly homeowner dues.
Small lot homes: Somewhat unique to Los Angeles, small lot homes might look like townhomes from a distance, but they are, in fact, more similar to single-family residences. The units in small lot complexes do not touch and sit on tiny pieces of land barely larger than the house itself. Buyers don’t have to pay dues to a homeowner’s association and instead pay much smaller maintenance fees for upkeep of communal space.
Developers of small lot homes often bill them as (slightly) more affordable alternatives to traditional houses. Right now, for instance, a three-bedroom small lot home in Eagle Rock is listed for more than $400,000 less than a similarly sized single-family home a few blocks away.
Co-ops: It’s possible to find some co-ops in Los Angeles, though they are not nearly as common as in other cities, like New York. These are similar to condos, except that buyers don’t technically own their units. Instead, they own shares in an association run by a very powerful board that often vets potential residents. Co-ops are also usually a bit cheaper than condos.
TICs: TIC—short for Tenancy in Common—housing has become more common in Los Angeles in recent years. As with co-ops, buyers don’t actually own their homes. Instead, they share ownership—and maintenance responsibilities—with other residents of the same complex.
TICs are some of the most affordable starter home options in Los Angeles, but there’s a catch: Most complexes are converted from pre-existing rental properties, meaning that renters were often evicted to make way for buyers.
Good luck in your hunt! Let me know in the comments below what your experience is finding a new home!