Housing Outlook for the Rest of 2020The average home price in Los Angeles County for the first 5 months in 2020 was $472,565 which is an increase of 13.5% percent compared to the average home
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Home Affordability Continues To Get Worse
All 58 of California’s counties have lower housing affordability than the rest of the nation. People are facing challenges even in our most affordable areas!
We also face policy challenges that suppress housing turnover beyond our structural underbuilding. Because of the high cost of housing, Californians disproportionately face potential capital gains on the sale of their home compared with the rest of the nation. In addition, California’s property tax system also inadvertently creates a financial incentive for a homeowner to stay in their home. National turnover rates are down as well suggesting that people also just don’t appear to want to move in general! Housing turnover is currently about half of what it has averaged historically.
The problem largely stems from the state’s inability to build housing on a scale anywhere even close to keep up with its population or economic growth. The problems didn’t spring up over-night and are the result of decades worth of structural issues and policy incentives. There are some actions that can be taken now to begin resolving this problem.
First, California needs to begin to remove state and local barriers to development which include reforming California’s Environmental Quality Act at the state level and loosening standards permitting zoning approval of new developments. Second, California needs to address public opinion as it relates to new housing in their areas. Many established areas are against affordable housing development and take on the “Not in My Back Yard” mentality preventing younger or less affluent residents in their neighborhood. This could have a reverse effect on the value of their own properties.
Other solutions include developing more creative and innovative financing solutions for populations who forgo the use of banks, have no formal credit history or operated a business as independent contractors and sole proprietors without formal employment histories but who may still be good credit risks. Regardless of what policy changes get implemented in Sacramento, if local elected officials are going to pay a price at the ballot box for approving new developments, they will have little incentive to support housing.
To find out if you qualify for a home or to put your home on the market, call Jack Lees at
818 262-0924 or go to http://www.realestatejack.com.