Peter Villes, a journalist and blogger with the L.A. Times reports that 80% percent of L.A. families can't afford to buy a home based on a report released from the California Association of Realtors.“ Now, we understand the real estate market doesn't work this way, but the Realtors try to measure "affordability," and it is worth taking a quick look at their findings. The California Association of Realtors reports that you need an income of $101,000 to buy an entry level home in Los Angeles, which means 80% of local families can't afford to buy a home.”
What's interesting to note is that the Realtors' report assumes the purchase of homes be made with an option ARM loan and about $50,000 for a down payment (10% of median-priced entry level home). I would think it would be in the Realtors' interest to take a good look at this chart .
The full article can be read here.
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1 comment:
So only 20% can afford a home under this New Math? You know the situation is grim when the REIC moves the goal posts and the numbers are still bad. Under their old affordability metric (assumes 30yr fixed mtg), less than 10% can afford a median home in LA.
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