April 13, 2006

LA County median home prices surpass $500,000

The LA Times reports:

If this is a bubble, it's sure taking a long time to pop.

For the first time, the median price of a Los Angeles County home topped the half-million-dollar mark last month, data released Wednesday showed. Four years ago, the median was half that...

In March, the median hit $506,000, up 15% from a year earlier and 3% above the prior month, according to DataQuick Information Systems, a La Jolla-based research firm that analyzes property transactions.

Los Angeles County thus joined Orange, Ventura and San Diego counties in crossing the half-million-dollar mark, keeping Southern California's place among the nation's priciest housing markets. Orange and Ventura counties' medians sailed through the $600,000 level in the middle of last year, and San Diego's broke through the $500,000 point last fall.

To buy a house at the median price, a household would need an annual income of at least $120,000 to qualify for conventional financing with a 20% down payment. The county's median household income: about $47,000.

And half a million doesn't exactly get you a castle. Don't even think about Beverly Hills. Try Norwalk, South Los Angeles or Panorama City [all pretty dismal], where the median price buys 1,500 square feet with three bedrooms and two baths.

Want something bigger? Head to Palmdale [in the desert, 75 miles north of downtown, and right over the San Andreas Fault], where $500,000 gets you 2,200 square feet and two stories. Want ocean breezes? There's a two-bedroom condo in Playa Del Rey [almost under airport flightpaths], built in 1971.

In general, the city of Los Angeles has poor quality housing stock, cheaply-built homes on small lots with relatively few neighborhood amenities such as parks. Most of LA was built out in a rush after the great housing shortage that followed WWII, and quality was not a high priority as it had been in much of America up through the 1920s. (The 1980s developments in farther suburbs such as south Orange County and Ventura County are quite nice though.)

My published articles are archived at iSteve.com -- Steve Sailer

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