Los Angeles has just picked up a first-place ranking that we probably really didn’t want. A new study from the UCLA Anderson School of Management puts L.A. at the top of the list of all U.S. cities as the single most unaffordable city for both homebuyers and renters.
The rest of the region didn’t fare much better in the report; three of the six most-unaffordable markets in the country are all in Southern California.
"Unaffordable" doesn’t necessarily mean most expensive, mind you. As Curbed Los Angeles reports, the unaffordability ranking compares home sale and rental prices to the incomes people are taking home in the area. So while some cities might have higher prices, averages wages in those regions might be higher to match. The squeeze across SoCal is high prices and lower incomes, making it a harder stretch for locals to cover rent or buy a house.
Contributing to the cost conundrum is the fact that job creation in Los Angeles, Orange County and elsewhere continues to grow, while housing development stays stagnant. More workers are being attracted to the area, but there aren’t enough affordable housing units to go around, so the price for the stock on the market keeps going up, the study finds.
One possible pressure release comes from luxury apartment rental and condo units. The market was flooded with enough of these that demand seems to be met, if not oversupplied. The researchers predict that might mean a slight dip in prices for that specific category of housing, at least for now. Townhouses, here we come.
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