Time to buy a Home in Los Angeles? Rents are out of control!
On the 5th of July the temperature in the various Los Angeles valleys is 96. But as we say, it is a dry heat, and the breeze makes it feel like 93. On the West side of the 405 Fwy, most cities are around 80. Is it any wonder people still want to live here, regardless of traffic and the cost of living?
But is there a limit?
33% of LA County renters spend more than half their income on monthly rent, reports a Harvard University's Joint Center for Housing Studies. Meanwhile wages have been down over the past six years. What are the options?
With the median apartment rent at almost $1500 a month, does it make more sense to buy? What kind of home can you own with a payment of $1500 a month in this market? A rough estimate would put the cost of that home at $300,000. Assuming $60,000 down, the mortgage would be $240,000. With property taxes and expenses, and an interest rate of 4.2%, you should be at or around $1500.
So what does a $300,000 home in Los Angeles look like?
A 2 bedroom home in Seal Beach, Hawthorne, Inglewood, Gardena, or San Pedro will keep you on the cooler climates, though the neighborhoods are as you would expect. You can do a lot better with a condo in any of those areas; better neighborhood, newer facility, and more amenities. You will definitely have a nicer overall home for the same money or less.
You don't have $60,000 down, and can't afford $1500 a month. Go further inland. You can buy a home in Los Angeles for under $150,000, use an FHA insured mortgage and only put down $5000. Now your overall out of pocket might be under $1000 per month.
You can get a starter condo or home in this difficult market, and now may be the best time. Business seems to be picking up a bit. If the economy bounces back even to a 3% annual expansion, prices and mortgage rates will both go up. If you'd like to discuss what you can afford and qualify for in a mortgage in Los Angeles, give Bill Rayman a call at 424-354-5325.
Bill Rayman Home Mortgage12121 Wilshire Blvd
LA CA 90025