Advertiser Disclosure

You Couldn’t Convince me to Move to L.A.

Ah, Los Angeles. A city of movie stars, pampered pooches, and string bikinis – but also beautiful beaches, endless sunshine, high-tech jobs, and plenty of health-conscious shops and fresh farmer’s markets.

There’s certainly plenty of allure to the City of Angels.

But there’s no way you could pay me enough to move there.

In a funny way – but really, it’s not funny – that’s almost literal. The cost of living in L.A. is insane. Sperling’s reports the cost of living for housing in L.A. is more than three times the national average. Many people living in L.A. do not get paid enough to afford a home there.

The city is facing an affordable housing problem, and it’s beginning to affect the workforce, according to a survey released recently by the University of Southern California and the Los Angeles Business Council Institute.

Let’s break it down

Experts say that people who take on debt that is more than 43% of their monthly income tend to have a harder time paying it back. It’s so widely accepted that most banks won’t approve a mortgage if it will push you over that limit.

In L.A., income for a typical household was $56,196 in 2015. A family making that much could, in theory, afford to owe $2,014 each month for all its bills – house, car, credit card, student loans, and any other debt.

But how much does a house cost?

Median home value for Los Angeles County in 2015 was $441,900. Even with a 20% down payment, monthly payments for a house at that price would be $$2,198*. That’s $184 more than the typical household can afford – and that leaves no room for student loans and car payments.

That’s from the Census Bureau, and a couple of years old. The California Association of Realtors reports actual sales prices are higher, reaching a median of $474,550 in March, or $2,354 per month.

Maybe renting would be better?

Maybe, but not much. Average rent was over $2,100 a year ago, and prices have continue to rise. The report from the California Housing Partnership showed the city needs 549,197 properties to address the affordable housing problem.

With housing costs that high, and continually on the rise, you couldn’t convince me to move there.

*Calculated based on a 20% down payment, 4% interest rate, 1.16% property tax rate, and estimated insurance premium of $1,000.


Moving?

Make sure your mail moves with you!

Change your address at USPS.com now, and get access to over $750 in exclusive mover's coupons!

Get Started

Related Articles

5 Tips for Moving With an Infant Without Going Crazy

Oh, what’s that? You have a baby and you’d like to move between homes with your belongings and mind intact? It’s quite a tall order, but it’s not out of the question. If you plan ahead and arm yourself for any possibility on moving day, you can get from one home to the next with...

Read More

Using Penske Truck Rental for Your Move

A quick look at Penske Penske Truck Rental can be a budget-friendly option for a DIY move. Cross-country or right next door, one of Penske’s five truck sizes in its nationwide fleet are sure to fit. These trucks range from a simple cargo van to mid-sized 16-foot trucks, and all the way to the large...

Read More

Moving a Smart-Enabled Home: What Technology Should Stay Behind?

Smart homes are convenient, environmentally friendly, and secure. It’s no wonder home automation is a great investment for homeowners …

Read More