A new study released on Monday has found that the Los Angeles metro area is the worst city for first time home buyers in the United States, with Riverside and San Jose joining LA in the bottom five.
According to the Bankrate study, which used 11 data points such as affordability, job market, and safety to measure the 50 most populous metro areas in the country, LA was largely ranked the worst due to a combination of low-average incomes and high housing prices. However, a currently poor job market also contributed helping it reach dead last behind runners-up Las Vegas and Seattle.
“LA is the nation’s second-largest metro area, but it has a hard-earned reputation for both high housing prices and low incomes,” said Bankrate in their study. “Los Angeles households headed by 25- to 44-year-olds have a median income of $80,643, according to the Census Bureau — barely more than in Pittsburgh. LA’s only stellar score came in the wellness and culture category, but that wasn’t enough to lift it from last place among the top 50 metro areas.”
Bankrate analyst Jeff Ostrowski added, “The housing boom of the past two years has widened the affordability gap between low-priced and high-priced metro areas. But with remote work becoming the norm for white-collar employees, it’s possible to keep the fatter paycheck while living in a cheaper area.”
The Riverside metro area, which came in 47th place overall, had similar factors. While the area drew many from LA and San Diego with cheaper housing, long commute times and a low average income in the area kept the area low on the list. 46th-ranked San Jose, meanwhile, had the highest income in the US, but also had the highest in housing costs, negating what should have been a big positive.
Los Angeles ranked last in new study on first-time home ownership
In the bottom 10, two other Californian areas, San Diego and San Francisco, were also listed, with both suffering many of the same problems of LA and San Jose. While a stark figure in terms of costs and affordability, many home buying experts noted that the study failed to incorporate many other factors when it came to first-time house buying.
“The study had a wellness rank that included being nearby food stores, hospitals, and cultural areas,” Michelle Torres, a real estate advisor for companies in many Western and Southern states, told the Globe on Monday. “Californian cities got high marks across the board. So it seems odd that things like weather, community, environment, and other factors that younger generations look at were not included. California is losing people, yes, but it is slowing down now.”
“But we’ve also seen many Californians returning. Sometimes this is due to their office stopping remote work and recalling them here, but many who went with a cheaper option didn’t realize just how bad the cold and snow were in Northern states or how bad the heat, humidity and mosquitos were in Southern states. Many also moved to states that later passed laws that they didn’t agree with. They got a cheaper house, but suddenly trans rights and the right to an abortion are now on the line. The study didn’t even factor these reasons in. First-time homeowners absolutely look at that sort of thing since so many didn’t and are now regretting moving there.”
“You wouldn’t believe how many Californians I’ve talked with regretted moving to Orlando. I have a Florida file on my computer and I had to make a separate file for returning people from Orlando it got so big.”
“Costs and the business climate are still driving many people out, but California is still attracting many people in with factors they aren’t counting. Take this study with a huge grain of salt. It is bad for places like LA and San Jose, but not this bad. First time homebuyers still want to move here.”
Other studies on home buying by city are expected to come out later this year. San Francisco and San Diego made the worst 10 city for first time home buyers in the United States, at #8 and #10 respectively.
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