How do people in Los Angeles afford it? (Orange, Santa Monica: real estate, apartment)

[SV808]

I've always wondered.

Looking through some figures, metro Los Angeles is one of the POOREST metros in the United States (below Detroit, for instance) as far as per capita income. Metro Detroit has a higher percentage of high net worth households than LA, but Detroit is dirt cheap.

LA ranks like 30th as far as income goes amongst metros (NYC/SF/DC areas are the highest earners), yet LA is priced higher than wealthier metros like Boston and Chicago.

How? Is everyone in LA up to their eyeballs in debt? Or did EVERYONE buy in before the bubble? It's funny how Hollywood glamorizes LA when the area is so low-wage and generally....poor.

[BRinSM]

a lot of young people move here and scrape by

many people live off the government

often times multiple immigrant famillies will pack into single family dwellings

people like myself (who have ample salaries) will make do with a smaller apartment to be in the city when i could afford a nice, big house in the exurbs or a cheaper metro area

often times people fall into many of the scenarios that i mentioned above

and for all the poor people in LA, there are many, many, many people with TONS of money

a lot of people make sacrifices to be in LA for whatever reason. one main reason for me is that my family is nearby. although i would move away and be further from my family, my wife doesn't necessarily agree with me. plus, it's nice to have a relatively short drive to be home for the holidays. additionally, most big cities in the US are expensive. most big cities also have sizeable ghettos. LA isn't that much different than other big cities, it's just so big that the negatives are magnified.

[wilczy]

also. many people do not live in LA. unlike many cities where people live in or near downtown, many people live outside of LA in cities like Santa Monica, Manhattan Beach, Westwood, Brentwood etc etc. It is deceptive

[John23]

A bunch of scenarios...

-The real estate bubble from 02 to 06 was warped everyones thinking. Homes in west la use to be $250 k in the early to middle 90's. People use to be able to afford them without taking out a lot of ridiculous loans.

-You have a lot of people who have lived here since the 70's, 80's, 90's.

-A sizable percentage of LA are immigrants..multiple familes in a dwelling.

-LA also attracts a lot of entrepreneurs and savvy educated immigrants (armenians, persians, europeans). Theres an investor class in LA.

-Some are simply high income earners (two high income earners to a house can work).

-Some live off the govt, welfare.

I'm not sure how a lot of young people make it. Its very common that you'll meet people..."I'm from detroit, I'm here to sell my music". I saw a guy two days ago handing out cd's to people on the street. Actors, musicians, artists...maybe they get some family help or save up for a long time.

[EscapeCalifornia]

Originally Posted by wilczy

also. many people do not live in LA. unlike many cities where people live in or near downtown, many people live outside of LA in cities like Santa Monica, Manhattan Beach, Westwood, Brentwood etc etc. It is deceptive

None of those places are exactly inexpensive suburbs and two of them are actually within LA city limits.

[SandyCo]

Some of us are lucky enough to have jobs that pay well enough for us to live here without going into debt. A lot of young adults still live with their parents, like my kids do.

And some people beneath poverty level end up in very bad situations - ten people to a two-bedroom apartment, for example.

[JohnG72]

-Good paying jobs.
-Two household incomes.
-Prices on real estate are sick overpriced and ought to be ignored for the moment. Pay more attention to rents as that will tell the real story.
-Shared living arrangements.
-Bought and stayed in the same house for decades. You will find large areas where people don't sell.
-The ghetto is not THAT expensive, especially if you have shared housing arrangements.

[Charles]

Originally Posted by SV808

It's funny how Hollywood glamorizes LA when the area is so low-wage and generally....poor.

Southern California gets a lot of free advertising (movies, TV), influencing people, increasing demand. Perhaps if other cities had lots of TV shows and movies set in them, demand would increase in those cities too.

Here's a similar thread on the Orange County forum:

What the Hell does everyone do to make money?

[LABornandRaised]

I happen to know a handful of below poverty folks and quite simply, they cram as many people into a home as possible to reduce the rent for each person. It's the sad truth that they will do whatever it takes to stay in LA. They will forgo some meals everyday just to make sure they pay rent.

[SOON2BNSURPRISE]

Just wondering if all those people in Detroit made their money off the failing American Automobile industry. Will those that live in Detroit continue to make the kind of money that they made now that the auto industry is in decline?

I looked online at homes selling in Detroit for less than a $1,000 and guess what, they are not what I am looking for in a home. I would venture to say that in our poorest neighborhoods the people are doing better than in those parts of Detroit.

Los Angeles may be in a downturn now, but I am betting that it won't last as long as Detroits down turn. This is not a rust belt economy and their are still many companies hiring here, even if it is still fewer than those that need jobs. I would venture to say that this metro area we all call home has more potential to offer jobs in the 6 figures than all of Detroit. So maybe their are more high net worth individuals I bet their are many more high income individuals here in the LA metro than in Detroit.