Finding a house for less than a million bucks can be difficult in popular Los Angeles neighborhoods. If you are willing to be a bit of a pioneer and look for a home in an area that is in the process of gentrifying, you might be able to pay as little as $300,000 for a place. (See also: Are You Ready to Buy a House? and California Property Tax Guide.)
Downtown Los Angeles has been in the process of gentrification over the past decade. Other areas also “upscaling” include Venice, Playa Vista, Arlington Heights, Westlake and Highland Park. That’s the conclusion of a study by UCLA’s Luskin School of Public Affairs, which also developed an interactive map of gentrification.
Gentrification began in Los Angeles after the 2000 housing crisis forced homeowners to become renters and pushed low-income renters out of the area as rents increased. “Higher rents make it difficult for low-income households to move into the neighborhood, so we see a net decline in their numbers,” Paul Ong, a UCLA urban planning professor, explained in a statement. “They are replaced by those who can afford the higher housing cost – people referred to as ‘gentrifiers.’”
UCLA found that neighborhoods near light-rail or subway projects are seeing the largest influx of white, college-educated, higher-income households – and also seeing large increases in rent prices. These same factors are also opening opportunities for people who want to be pioneers in neighborhoods beginning the process of gentrification for homebuyers.
Jefferson Park and West Adams, located between the 10 Freeway to the north and Exposition Boulevard to the south, are two booming neighborhoods in the early phases of gentrification. "Metro has been a big driver," Robert Rodriguez, a Teles Properties agent, told the Los Angeles Times. “You can walk to the Expo Line and go all the way to Santa Monica.” These two neighborhoods will also benefit from the Crenshaw Line, which will connect the Expo Line to a station near Los Angeles International Airport in 2019. Flippers, people grabbing rundown houses for $300,000 and more than doubling the price after renovation, are very active here.
City Terrace: This hillside neighborhood in East Los Angeles has two- and three-bedroom homes in the $300,000 to $400,000 price range. You’ll be about 10 minutes from downtown L.A., but you won’t find the restaurants and shops that exist in more upscale neighborhoods. But, as gentrification continues, the commercial areas nearby will revitalize, too.
Cypress Park: On the northeast side of Los Angeles, this area includes three neighborhoods at the beginning stages of gentrification – Highland Park, Atwater Village and El Sereno. While there aren’t many commercial options in these neighborhoods, trendy commercial areas such as York, Eagle Rock and Glendale boulevards are nearby.
Inglewood: Located near the 405 and 105 freeways as well as La Cienega and La Brea boulevards, this is a great location on the west side of Los Angeles. The Crenshaw/LAX line, mentioned above, will make this area even more popular. Small single-family homes can be purchased for as little as the mid-$400,000 range. “Buyers have to decide where they fall on the gentrification scale. If you buy in an area like Inglewood, with a lot of un-remodeled homes and a lack of new construction, it’s going to be cheaper right now. But do you really want to live there yet?” Richard Schulman of Keller Williams Realty told U.S. News & World Report.
Wrigley: North of downtown Long Beach, this neighborhood of Spanish-style single family homes built in the 1920s, ’30s and ’40s is seeing a revitalization. Homes in Wrigley are selling in the low- to mid-$500,000 range. As with other gentrifying neighborhoods, commercial areas are not yet there, but likely will come as higher-income families move in.
Buying in areas at the beginning of gentrification gives you an opportunity to own a home in Los Angeles for a lot less than $1 million. However, doing so should come with the understanding that many homes in the area won’t be fixed up yet and nearby shops and restaurants will likely be limited to mom-and-pop stores and fast food. Also read 6 Warning Signs Before You Buy a Flipped Property (if you're considering buying one).