Just a few years ago, the real estate market in the United States was taking a beating. People were rapidly losing value in their homes. Those days are but distant memories for those who live in Los Angeles and some of its surrounding suburbs. The median price for a home in the Los Angeles area is now just under one million dollars.
This nearly one million dollar per home price tag is just part of the story. Median home prices in some of the more desirable locations within the Greater Los Angeles Area such as Pasadena are as much as three million dollars.
The average time that a home is on the market is declining. In some parts of Los Angeles, the average time on the market is 19 days. Most houses in the Los Angeles vicinity are also selling for over the asking price. In areas like Pasadena, two-thirds of the homes sold for more than the price listed.
Those who analyze the real estate market believe that there are two reasons for this rapid increase in prices. First of all, there is scarcity in the market. Some of the more sought after home locations have only a handful of listings available. When a home does come up on the market, the bidding war begins.
Another reason for the price rise is the allure of LA. People still believe that Los Angeles is one of the best places to live. They believe it is a place where the action happens, and they desire to be a part of it.
Recently, the price of the average home in Los Angeles has soared to nearly $700,000. While this may not appear overly exorbitant to residents of other high-priced cities, like San Francisco and New York, it is bad news for a town in which the median wage is only $55,000. This is a reflection of the sharp dichotomy throughout the city’s haves and have-nots.
The fact that the median home price is now shooting towards 15 times the median annual household income means that even for households with two earners, Los Angeles is increasingly becoming a place where the American Dream of homeownership is permanently out of reach for the average person. This has negative long-term implications for the city as it means that fewer families will be able to afford to form in the first place, driving the city’s young population away or causing them to entirely forgo marriage and children.
At the same time, the huge disparities between home prices and average wages are also causing a crisis in the affordability of rental properties. Los Angeles may now be the country’s capital city for homelessness, an epidemic that has been seen sweeping through the city’s streets, parks and other public spaces over the past decade. The homelessness problem has reached such epidemic proportions that entire neighborhoods have taken to the streets, protesting the appearance of tent cities within their posh enclaves.
Yet, with even the cheapest available rental units being completely unaffordable for lower wage earners, the homelessness problem seems all but guaranteed to continue apace. Many have noted that this has created a distinctly third-world vibe throughout the city of Los Angeles, which once hosted some of the most idyllic and peaceful neighborhoods in the state of California and provided the model for the ideal American family as seen in shows like the Brady Bunch, E.T. and many others.
Now, much of the city has been overrun with the homeless and third-world immigrants, who are often willing to pack 10 or more people into a single apartment, living in squalid conditions that make a mockery of the American Dream.