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| Image Source: articles.latimes.com |
High income earners may have no problem finding a home and settling comfortably in California. Middle- and low-income earners, meanwhile, may have to settle for less than what they want in a home to be able to afford it.
According to a report from HSH.com, a mortgage research firm, buyers need to have an annual take home salary of about $97,000 to reasonably afford a median-priced home in the Los Angeles and Orange counties. In the third quarter of 2014, a buyer would have been able to purchase a typical house at $10,000 less, indicating a rapid increase in home prices.
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| Image Source: nationalmortgageprofessional.com |
Federal data show that higher home prices have driven hundreds of thousands of low- and middle-income workers to other states. California has been losing residents to other parts of the country since the 1990s and more than half of the most expensive real estate markets in the US are found in California.
This trend highlights a challenge to the economy: keeping workers of moderate means in some of the nation’s most expensive housing markets. For cities like Los Angeles, being able to attract the tech industry and its high income earners is well and good but its leaders also need to make sure that the city is supporting a housing and transportation infrastructure for middle- and low-income earners who contribute to the local economy.
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| Image Source: newgeography.com |
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