In the Los Angeles area, fewer than one in four households headed by persons in their 20s or early 30s — known demographically as “millenials” — can afford to buy the median-priced home, which now goes for just over $500,000.
Overall, just 34 percent of households in the L.A. metropolitan area can afford that same home. Which means that in the housing department, it only helps a little to be older and more established in a career.
Things are even more restricted in the San Francisco Bay area, where the median-priced home costs about 8 percent more than around Los Angeles.
Just 14 percent of all households in the city itself can afford the median-priced San Francisco home, which runs even higher than the regional median. Affordability barely rises in Marin County, where a mere 15 percent of households can afford a median-priced home.
Things aren’t much looser in Sonoma, San Diego, Orange, Contra Costa, Santa Clara, Alameda, Santa Barbara, Ventura and Napa counties.
In the larger regions of Northern and Southern California, things loosen up as you get farther from the coast. In the Inland Empire region of San Bernardino and Riverside counties, 47 percent of households can buy the median priced home if they’d like, while half can in Solano County.
The Central Valley is about the only large part of California where housing is reasonably affordable, with 56 percent able to buy the median-priced home in Madera and Tulare Counties, 49 percent in Sacramento County and 64 percent in Kings County.
By comparison, the national average is 57 percent affordability.
If that’s not a crisis, it’s hard to see what qualifies. But this crisis can’t be photographed as easily as a half-empty reservoir, so it’s tough to dramatize the situation.
And yet, if you’re a 28-year-old father who would like to live and work in the cooler, breezier climes near California’s coast, you can pretty much forget it unless you’re a computer programmer, lawyer, doctor or in another high-salaried job. Even young professionals pulling down salaries approaching $200,000 a year often can’t afford to buy in places like San Francisco, coastal Orange County or the West Side of Los Angeles.
In part, the high pay of workers in high-tech companies drives this crisis, which for many is much more serious than the ongoing drought. There’s no sense worrying about cutting the watering time on your lawn if you can’t afford to own one.
The Western Los Angeles County scene is among the most dramatic.
There, realtors report large numbers of home sales now see straight cash payments. This in an area where the typical three-bedroom house goes for more than $1 million.
“You’ll see scruffy-looking 20-somethings in t-shirts and jeans or cutoffs walk up and plunk down well over a million,” said one prominent realtor.
This happens because of high salaries offered to creative and highly-skilled employees of companies like Google, Yahoo, YouTube, EA Sports, Twitter, Snapchat, Hulu, TrueCar, Edmunds.com and many more with strong presences in the so-called Silicon Beach area. They drove the price of one three-bedroom house that sold for $46,000 in 1973 to more than $1.8 million last month.
Rents in the most desired areas have risen comparably, to the point where a two-bedroom apartment in much of both Los Angeles and San Francisco now goes for upwards of $3,500 per month, or more than $40,000 a year.
One obvious solution might be more housing, which ordinarily could drive prices down. But with thousands of new units under construction and even more on the drawing board in the Playa Vista planned community north of the Los Angeles airport, prices are rising, not dropping.
Meanwhile, slow-growth advocates concerned about what more housing might do to already gridlocked traffic want housing growth to stop, and never mind affordability.
The result is likely to be very slow growth in a state whose population increase last year amounted to just over 1 percent – far below the influxes so common in California’s high-growth 20th Century.
So the state will likely lose seats in Congress after the next Census to states like Texas, Arizona and Nevada, where housing is both cheaper and more available.
Mother Nature might eventually solve the drought crisis, but it’s hard to see what might solve the housing situation, fast becoming a frustrating catastrophe for many.
Email Thomas Elias at [email protected].
