House affordability in Los Angeles

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Oct 7, 2021 20 Comments

Planning to buy a SFH in Los Angeles area.
The affordability calculators and loan pre-approvals say we can afford a $1.5-$1.8M house. LA houses are beautiful if we go to the $2M range. But a little concerned about the monthly payments.

TC:
$575k (225 base)
w appreciation: 650k

Spouse TC: 100k base

No debts
NW: 700k
Cash: 200k
YOE: 6

Questions:
- What is the price range that people with the same financial profile usually look for?
- Do we save a little more cash and stretch for a bigger house?
- What areas in LA to look for? Encino, Sherman Oaks, Santa Monica, Culver City, Woodland Hills seem good. How about East LA or North Hollywood?

No trolls please, paid the Blind tax already. Happy to answer any interview related questions or provide referrals if needed. DM me for those. #personalfinance #investments #realestate

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  • Wouldn’t go higher than 2m, your money still needs to grow and you don’t want it all in a house. Assuming you do 20% down and have a $8k-$10k mortgage
    Oct 7, 2021 1
  • New
    LVOf37

    New

    LVOf37
    We make $450k tc but saved up $650k cash in our savings account and comfortablly bought 2.1m home last month
    Oct 7, 2021 2
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      OP
      How much was the down payment and what’s the monthly PITI?
      Oct 7, 2021
    • New
      LVOf37

      New

      LVOf37
      30k closing costs, 420k down (20%), we have $8k payments and still had to have 6 month cash reserves
      Oct 7, 2021
  • You've listed a giant geographic range with wildly different commuting times to different parts of the city. Figure out where you want to be first.
    Oct 7, 2021 1
  • Yelp
    oppop

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    oppop
    You can easily go for 2.5M
    Oct 7, 2021 2
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      OP
      Our total base is 325k so monthly around 15k after taxes.

      2.5M house PITI would be 13k per month with a $200k down payment.
      Or did you include selling monthly RSUs?
      Oct 7, 2021
    • Yelp
      oppop

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      oppop
      Given the TC of 700 and good savings it’s safe to go for 2.5M. I included rsus too.
      Oct 7, 2021
  • We have a similar profile.

    Nw 900k which includes about 250k in 401k, rest in stocks, already liquidated about 300k as we are actively looking for a SFH in Seattle area

    Household tc = 650k, combined base = 380k

    Online mortgage calculators tell us that we can afford 2.5M+ but we aren’t comfortable having that kind of debt. We are trying to keep our budget lower than 1.5M

    We don’t have a child right now. But day care and other expenses could easily go up to 4k per month

    You may reach a different conclusion if you are more risk averse
    Oct 7, 2021 1
    • Snap
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      OP
      Makes sense. Having so much debt is scary and might need us to sell fast moving assets. Good luck with you search.
      Oct 7, 2021