Back in 2010, Los Angeles Mayor Jimmy McMillan took one look at Los Angeles realty costs and exclaimed, "Rent is too damn high!" In 2016, the commercial real estate website JLL concluded that Los Angeles had become the 22nd-least-affordable city in the United States, resulting in one of the largest homeless populations in the country. The city's real estate prices have not declined since.

Market Insights

The price of the Los Angeles real estate market has rocketed within the last five years. In 2015, the Zumper National Rent Report found that Los Angeles notched a new record of $1,830 for a one-bedroom apartment after a 7% year-over-year jump in rent prices.

Reasons for the skyrocketing prices include the fact that in Los Angeles, wages are disproportionate to housing costs. Cities such as New York and San Francisco have high property costs too, but their citizens can expect to take home larger checks. In Los Angeles, however, housing costs soar and wages remain low.

Housing prices also scrambled to unprecedented heights, since there are fewer houses to fulfill the city's needs. This is because homeowners tend to hold onto their homes, rather than pay the high costs of new homes and higher property taxes. The California Association of Realtors reports that more than 70% of Californians have retained their homes since 2000.

Furthermore, 41% of Los Angelenos prefer to rent rather than buy, which crimps the housing market further, leading to higher home costs in turn. In April 2016, home values rose 7.4% over the past year, and there are predictions that they will rise 2.0% over the next year.

All of these reasons cause some observers to discuss a housing bubble, where property costs in Los Angeles, they say, bowl themselves out of proportion as they did in 2006. Other observers argue that you can still find some affordable property in certain declining parts of the county.

Property and Transfer Taxes

Proposition 13, a law passed in 1978, stipulates that property taxes in California are limited to 1% of a property’s market value. This makes the average property tax rate in California 0.81%, which is less than the national average of over 1.1%. In 2016, the average homeowner in Los Angeles owned a house that averaged $420,200 in value. The owner typically paid $3,301 a year in property taxes. Los Angelenos also had to pay a 1% tax rate that was tagged to local tax. All homeowners in California paid this tax.

Transfer tax refers to the tax paid by the buyer, seller or both parties when property transfers from one party to another. Transfer tax depends on the property's sale price, and in California the seller usually pays this tax. As of 2016, the transfer tax for districts in LA was $1.10 for each $1,000 of the total property value.

Most Expensive Neighborhoods

In 2015, the most expensive neighborhoods included Santa Monica (housing costs rose 17%), Westwood (housing costs rose 15%) and downtown LA (costs hovered at 15.7%). Other areas, such as Westchester, Ladera Heights and Congress North, also saw an increase above 15%. There were also slight increases (5 to 10%) in Echo Park, Koreatown and Venice. Neighborhoods that stayed constant, or showed a slight increase of about 5%, included Mar Vista, Marina Del Rey, South Robertson and West Adams. These neighborhoods tend to be the most expensive districts of Los Angeles.

Top Real Estate Websites

Realtors like to use the aesthetic Laura Marie Homes real estate website for features that include easy-to-navigate communities, detailed properties, resources and contact forms. Green Real is the website preferred by eco-friendly individuals. It gives readers important information about eco-friendly lifestyles and refers viewers to the green real estate side of Los Angeles. Los Angeles Real Estate provides real estate information for luxury homebuyers and investors who want to buy homes in Los Angeles. For a less selective market, Curbed LA makes the cut. It is the go-to website for informing people about all aspects of living in Los Angeles. The LA Times also informs readers about top real estate sales in Los Angeles and covers general realty news on the area.

Mesa, Arizona Real Estate Market

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