Originally posted by @Account Closed:
With respect to the top employment I think we are missing a huge point. Los Angeles (as with other big cities) draws buyers from around the world. Foreign nationals will purchase property in order to hold their money in a blue chip investment. They view it as less risky than their own backyard for a number of factors. With respect with 28% to 30% of people paying cash-given the average home price is higher than the U.S. average it speaks volumes. This why you see an uncoupling of wage earners and home sales. The trend of Los Angeles as someone else mentioned is the lower wage earners are leaving the city as higher wage earners are entering.
As for "prime locations" worsening- I have yet to witness this. Instead areas that were considered crime ridden have gentrified to the point that houses are now $1MM and above (Venice echo park silver lake).
lol... I think your point is also missing the point :) ; we are for instance talking about how escalating property prices is growing at a rate that far outpaces wage growth of Californias, not foreign entities. Consequently, Californians can't afford a medium sized house based on prevailing wage levels.
The fact that you have to cite foreign buying activity should also be a supporting argument to this fact. Its like property prices in Vancouver and Toronto, which started to get crazy high that the government there specifically imposed a 15% tax on any transaction by foreigners to control prices. Talk about price discrimination, thought that was ust a marketing thing :)
If I were to also look into what fraction of the transactions in CA involved foreign nationals, I am sure this might also be exagerated way out of proportion as with other things so far. I haven't seen any concrete numbers yet.
Of course some foreign nationals will view investing just about anywhere in the US less risky because in many countries they face other forms of risk you typically don't face here... country risk, political risk etc... in some cases just someone knowing you have a few millions, heck a few thousands even, parked in the bank is a risk by itself.
I have seen the employment and wage data for LA county specifically and for all industries and sectors. From what I am seeing, the DTI may have to be bumped way up again, way up to 70% range, at which point, there would likely still to be issues.
And since when is police and fire department employees considered low awage earners? In most cities, they typically are able to afford to live where they work, apparently LA is an exception to this. I would almost bet SF is too.
