California County Comparison
We often hear that the Los Angeles real estate market is one of the most expensive markets in the country. But is it really? Thankfully, the California Association of Realtors maintains a database of statistics dating back to 1990 that allows us to examine the historical real estate markets within California and, more interestingly, compile a California County Comparison. The data reveals that while there are certainly portions of the Los Angeles real estate market that can be extremely expensive, Los Angeles County as a whole is actually relatively affordable.
California County Comparison – Median Sale Prices
The median existing single-family home sale price in Los Angeles, as shown in the below graph, is historically low in comparison to San Francisco, San Diego, Santa Barbara, and Orange County. In 2013, the counties charted below ranked from least expensive to most expensive in the following order: (1) Riverside, (2) Los Angeles, (3) San Diego, (4) Santa Barbara, (5) Orange County, and (6) San Francisco. San Francisco’s median sale price in 2013 was a staggering $851,900, more than twice Los Angeles’s median sale price of $405,580.
California County Comparison – Price Fluctuations
The data also importantly allows us to compare the relative increases and decreases in prices each year in the various markets, including the Los Angeles real estate market. The below graph charts out the percentage change in median sales price every year since 1990.
The one stand-out appears to be San Francisco real estate market, while the remaining counties generally followed the same path. The San Francisco real estate market flourished in the late 90s and 2000 and then it grew slowly until 2007, while the remaining markets grew steadily during the very early 2000s and expanded more quickly during 2002-2004. The difference is likely attributable to the “dot-com bubble” of 1997-2000, which drew a large, wealthy population to San Francisco’s neighboring Silicon Valley, and that same bubble’s subsequent burst in the early 2000s. Interestingly, San Francisco also weathered the more recent recession years much more sturdily by dropping only 10-13% annually, while the remaining counties dropped 25-45% in 2008. This is likely attributable to the fact that its growth had already been tempered by the burst of the dot-com bubble.
California County Comparison – Why Is Los Angeles So Cheap?
Of course, this begs the question of why the Los Angeles real estate market is typically thought to be so expensive, whereas the data shows it is relatively affordable. The answer likely lies in diversity. Based on information provided by the US Census Bureau, Los Angeles County is the most populous county in the country with a population of over 10 million. San Diego and Orange County are the next most populous counties in California, with populations of roughly 3 million. Thus, the Los Angeles real estate market caters to a much larger and more diverse populous, making its real estate market larger and more diverse than ohers, while the remaining counties cater to more specific markets.
In sum, it is not necessarily incorrect to label Los Angeles as one of the most expensive real estate markets in the country – it just depends on which part of Los Angeles you are referencing. As shown by this California County Comparison, part of Los Angeles’s unique character comes from its diverse populous, and that diversity is reflected in its real estate market.
If you would like to further discuss how Esquire Real Estate Brokerage, Inc. can help you in the Los Angeles real estate market, feel free to give us a call at 213-973-9439 or send us an email at info@esquirereb.com.
