Even at the Bottom, Many Still Will Be Priced Out

The Associated Press decided it was time to write a little analysis piece about the state of the real estate market, and, interestingly, it decided to focus on the Los Angeles market to illustrate its points.

The main point the author wanted to make was that even if prices slide another 10, 15 or even 20 percent in L.A. and other “bubble” metro areas, plenty of hardworking folks still will find themselves unable to afford a home near where they work.

That’s the dilemma this week for the nation’s lawmakers and millions of Americans who are priced out of homeownership: any rescue policy to stem foreclosures could artificially prop up home prices and perpetuate the affordability crisis in many major cities coast to coast.

Here’s a real-life example:

Courtney Lind and her husband have a combined income in the six figures. They’ve been biding their time to buy in Los Angeles for three years, but they want to buy before their second child is born in December.

The Linds can afford up to a $500,000 home — above the median price for the county — but still short of what homes go for in the Los Angeles neighborhood where they rent.

“We would love to stay here, but anything in our neighborhood is $600,000 or above,” said Lind, 33.

In their price range, she said, they can get an 80-year-old fixer-upper, with about 1,000 square feet of space, and a very little yard on a busy street.

That’s exactly the situation in the area I live in near Wilshire and La Brea and many similar neighborhoods in central and western L.A. You can rent a two-bedroom duplex for a fraction of what a mortgage payment would be.  Decent (but small) homes start at about $900,000; a two-bedroom fixer costs around $700K, if you can find one.

The folks highlighted in the story are considering moving farther away from the city to a place where houses are cheaper, as many have done.  The tradeoff, of course, is the stress, expense and wasted time of commuting.  Whether that’s worth it or not is a personal decision.

A Torrance resident quoted in the story says he’s considering a move to Long Beach, which he thinks is not as nice as Torrance but is comparably affordable.  That’s an area my husband and I were looking at, until someone told us that it can take up to two hours to get to the Miracle Mile, where I work, during rush hour.  Still, I agree that the prices in Long Beach are lower than other places — and Long Beach is centrally located, has some nice older homes and historic neighborhoods, and, last but not least, the only off-leash dog beach in Los Angeles County.

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