Thursday, November 29, 2007

California Cities Top the 65 Least Affordable Metro areas.

A new survey on the least affordable metro areas in the nation finds that California cities still head the list. California holds 9 of the slots on the top 10 list of least affordable areas in the country. The number 1 spot on the list is Napa County with the Los Angeles-Long Beach region dropping to the number 2 spot on the list. The rest in order are:

3. Salinas, CA,
4. Santa Ana-Anaheim-Irvine, CA,
5. San Luis Obispo-Paso Robles, CA,
6. San Francisco-San Mateo-Redwood City,
7. New York-White Plains-Wayne, NY-NJ,
8. Santa Cruz-Watsonville, CA,

9. Merced, CA
10. Santa Barbara-Santa Maria-Goleta, CA

Being on this particular list may not be a distinction that we want but I suspect it isn't ever going to change. The Los Angeles metro region will always be at the top of the 10 least affordable areas.

Herein lies a very real problem facing Los Angeles area residents in general and Beach Cities in particular... we are probably never again going to be affordable for the median income earner. Long Beach is considered part of our region. I know from reading Laurie Manny's Long Beach Blog that prices in Long Beach have really dropped in the last 8 months. Including the Long Beach area in our Metro region brings down our prices somewhat yet we are still #2 in the nation.

The median income in our region according to the survey is $61,700. The median price of property is $515,000 and the affordability index is 3.7.. which is up from last quarter at 3.0. We would have to have complete economic chaos and collapse for things to change much .... and I don't think that is going to happen. This is especially true in the Beach Cities.. we may be in for prices softening more in the coming months but not the drastic price declines many are praying to see.

For the prices in the LA region to drop 50% overall we would have to have a a recession that made the one in the 90's look small by comparison. I'm talking about major job losses across the board not just in aerospace or the film industry. Those of you praying for a 50% price decline might find yourself without a job... making buying a moot point at best. There is an old saying.. be careful what you wish for... you just might get it....

The economic base in Southern California has changed in the last 25 years. We have moved to an economy based on service and technology rather then manufacturing. The problem is that the median income has not risen to meet increases in the overall cost of living. It is unlikely that the cost of living will be decreasing. What this may mean is that owning a home may not be in the cards for many in our area unless they change the location where they want to live.

If you want to live in a Beach City... it may have to be Long Beach not Manhattan Beach or Hermosa Beach or Redondo Beach. You can buy a nice condo there under $400,000. There isn't anywhere in our Beach Cities with those prices. You may need to seriously consider Torrance, Hollyglen, Wiseburn, El Camino Park or Lawndale as an alternative to the Beach Cities.

When I started selling real estate in 1979 North Redondo was not considered a good area.... however times have changed as those who could not afford Manhattan Beach or Hermosa Beach moved to Redondo as an affordable alternative. Buyers may need to make similar decisions in the future about inland areas that are close to their work and still within a reasonable drive to the beach. Torrance may not be hip but it does have good schools. Strand home prices are not going to be within reach of most of us ever again.

South Bay-Beach Cities: Sold October 2007

South Bay-Beach Cities: September SOLD 2007
South Bay-Beach Cities: August SOLD 2007
South Bay- Beach Cities: July Sold 2007
South Bay-Beach Cities: Sold June 2007
South Bay-Beach Cities: Sold May 2007
South Bay-Beach Cities: Sold April 2007
South Bay-Beach Cities: Sold March 2007
South Bay-Beach Cities: Sold February 2007
South Bay-Beach Cities: Sold
January 2007


Vicki Lloyd said...

Hi Kaye-

I'm surprised that Santa Barbara isn't on that list. CAR keeps telling us in their monthly newsletter that it is the least affordable. Maybe it's too small to get counted in the national surveys?

Vicki Lloyd

Kaye Thomas said...

It is on the list but it's number 10