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L.A. is second least affordable home market for the middle class

Category : Uncategorized

The Los Angeles area is second behind San Francisco as the nation’s least-affordable housing market for the middle class, according to a report from Trulia.

Staff L.A. Biz

The Los Angeles area is second behind San Francisco as the nation’s least-affordable housing market for the middle class, according to a report from real estate data firm Trulia.

A middle-class household earning the median income of $54,000 can afford just 22 percent of homes for sale in Los Angeles, based on whether the total monthly payment — including mortgage, insurance, and property taxes — is less than 31 percent of the household income, Trulia said. In San Francisco, only 15 percent of the middle class can afford a home.

Six of the seven least-affordable housing markets in the country were in California. San Diego was third with 25 percent, while Orange County ranked fifth at 26 percent, San Jose was sixth with 30 percent and Ventura County was seventh at 33 percent.

Looking under submarkets in L.A. county, Trulia’s survey found that in Pasadena and the San Gabriel Valley 626 area code, only 11 percent of the middle class could afford a home. In the 310/424 area, encompassing the Westside and beaches, homes were within reach of 14 percent of the middle class. The rates were 16 percent in 213, downtown and central L.A., and 16 percent in the San Fernando Valley’s 818 and 747 area codes.

In the past year, affordability has fallen modestly, hurt by rising home prices, but helped by lower mortgage rates, Trulia said. Nationally, 59 percent of homes for sale are within reach of the middle class, compared with 62 percent last October.

High-income metro areas are generally less affordable than low-income metros because high-income households bid up home prices, and high prices push out lower-income households, according to Trulia Chief Economist Jed Kolko. In addition, higher-income metros tend to have less new construction than lower-income metros.

“Unless incomes increase substantially, homeownership will slip further beyond the reach of many households,” Kolko wrote in the report.

Silver Lake Los Feliz

Baby Boomers Say They Are Not Moving Out Of Their Homes

Category : Uncategorized

Money Moves
Baby Boomers say they aren’t moving out of their homes
By Les Christie @CNNMoney October 31, 2014: 2:57 PM ET

The sandwich generation

Instead of flocking to sunny beach havens or downsizing to a condo in the city during their retirement years, a majority of Baby Boomers say they’re just going to stay put in their old home.

In a survey of 4,000 Baby Boomer households conducted by the non-profit Demand Institute, 63% of Boomers plan to stay in their current home once they retire.

Much of that has to do with the recession. The financial crisis put an end to years of rapid wealth accumulation, causing the typical Boomer household’s net worth to fall to $143,000 in 2013 from just over $200,000 in 2007, according to Federal Reserve data.

Related: Why everyone is moving to Texas

Not only that, but this generation is also carrying a lot more mortgage debt. The survey found that the median outstanding mortgage balance for 50- to 69-year-olds was $118,000 in 2013, up from $48,743 in 1992.

“Boomers’ nest eggs have shrunk dramatically in recent years,” said Jeremy Burbank, vice president at The Demand Institute, the non-profit think tank run by the Conference Board and Nielsen. “Financially, this generation is not necessarily ready for retirement, and half of their assets are tied up in their homes.”
boomers move

Not everyone is planning on staying put, however; 37% of the Boomers surveyed said they were planning to make a move.

Nearly half of the movers said they wanted to get a bigger place — and that they intended to spend more money on it. But with a median net worth of just $40,000, this group was among some of the least wealthy surveyed. In fact, the report found that many of those who were looking to “upsize” were also looking to switch from renting to owning.

Those who said they plan to move into a smaller home were much more affluent, with a median net worth of $322,000, the Demand Institute found.

Silver Lake/Los Feliz