Los Angeles has the highest percentage of renters in the country, and it’s not looking like our spot at number one will be challenged any time soon. The high cost of home ownership has made it officially cheaper to rent a place in LA County than to buy one, says the LA Times, citing a RealtyTrac study that looked at prices for 2013’s fourth quarter. In LA County, the morgage on a median-priced three-bedroom (including principal, interest, property taxes, and maintenance and insurance costs) would run you $1,987—$100 more than it would cost to rent a similar space (that’s fair market rent, of course).
According to the study, the median three-bedroom residence in LA County would run $417,333; to get financing for a place like that, a buyer would have to bring home at least $95,389 yearly. That’s $27,000 more than a buyer would have needed to make to buy the same place a year ago. It’s also $42,000 more than the median household income. The spike in prices was chalked up to “investors and other cash buyers who are not tethered to the typical affordability constraints” by a RealtyTrac VP. Not included in the report was the potential for a residence to appreciate in value, which it always does eventually.
Even though it is more affordable to rent than buy in Los Angeles, it’s actually pretty unaffordable—rents are now higher than they were pre-recession.
Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed
“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”