If you are considering buying a home in Greater Los Angeles, or more specifically the San Fernando Valley, it can be a truly daunting concept; houses are expensive around here. You also wouldn’t be alone in your desire to live in a major city though, as roughly 3 million people make the move to major cities across the country every week (as of the last census, roughly 80% of all Americans live in urban locations.) When you think about it, this makes sense; big cities are where most of the high-end jobs are, it’s where you can experience a wide array of different cultures, and (let’s face it), cities are where most of the fun stuff happens; cities have everything you could ever want, and more.
The reason this can be such a frightening prospect is that the down payment for houses in cities, Los Angeles specifically, can be staggering; it frequently feels like it would be impossible to ever save enough money to buy a home here. The sad fact is that many people decide to stay renters forever. This is a terrible idea – you are essentially throwing money away because you aren’t thinking ahead towards the reality that owning property is a major stepping stone to financial stability (also there is no landlord to tell you what you can and can’t do).
The fact of the matter is, if you plan ahead, down payments are not impossible; you just have to tighten your belt a bit and remember that you have a much more long-term goal in mind (5 to 10 years if you are starting today). Keep in mind, those massive numbers don’t look so massive when you break them into attainable goals (like daily/weekly savings).
Let’s break down the numbers. In May 2019 the median price of a home in Los Angeles was $769,524, with an average down payment of 18.1%; this comes out to $81,078. In order to attain this goal in 5 years, you would have to save $44.20 per day, or $22.20 if you are shooting for a 10 year goal. When looking at ways to save this amount, we computed into to the number of Grande Lattes you would have to forego daily ($3.65) to save that money over 5 or 10 years. If you don’t drink a lot of coffee, the numbers are still useful (just substitute something you do buy regularly). It comes out to about 12 lattes over 5 years and 6.2 lattes over 10 years.
The bottom line is that you don’t need to be a celebrity to purchase a nice home in Los Angeles, you just need to be a little more frugal with your money.
At the Chernov Team we understand that knowledge is power, and knowledge of how to save for your dream home in Los Angeles is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.