When You Can’t Afford What You Want

Every once in a while, I’ll turn on the TV and see one of those California tourism ads that show young, tanned people splashing in the ocean, going on wine tastings, enjoying Disneyland and mountain biking around the state. Those are the ads that make my East Coast friends green with envy when I say I’m soaking up the 85-degree weather here in Los Angeles in February. However, anyone who has ever lived in LA will probably agree that all that California sun comes at a price – a ridiculously high price. If you are considering buying a home in LA – especially if you didn’t grow up here or are moving here from another state – you are probably experiencing some major sticker shock right now. It can be extremely disappointing to find out that your slice of the American dream is going to cost you four times what you were expecting it to. If you are in this situation right now, please don’t give up! I encounter this with buyers on a weekly basis, and my clients almost always end up finding a home they love despite the reality of LA prices. If you are feeling discouraged about your current options, here are a few things to think about to help you move forward in your search.

Consider New Neighborhoods

Los Angeles is a huge city with countless neighborhoods of all different feels and price points. Spend some time driving around and getting a sense of what the atmosphere is like in different parts of the city. There are a ton of great neighborhoods out there that most buyers have never heard of. One example: Hermon, a small neighborhood southwest of South Pasadena. This is a quiet area minutes away from the affluent South Pasadena and San Marino shopping areas. You may have your heart set on a specific neighborhood, but if your budget leaves you with no options, you will probably need to keep an open mind and research some alternate areas.

Downsize

We’d all love to have a 3 bedroom, 2 bath, 2000 sq ft house with a huge yard and a swimming pool. But the reality of your budget may be that you can only afford a 2 bedroom, 1 bath home. This is especially true if you are deadset on a neighborhood at the top of your price point. If you can’t compromise on location, you may need to reevaluate exactly how much space you need. Can you utilize the garage as a bonus area? Can you put a pull out couch in your office and have it double as a guest room? I had some wonderful clients a few years ago that bought a one-bedroom house for themselves and their two sons to share. By using some amazing space saving tricks, they were able to make a very small house work for them.

Pull out your Tools

You can usually get a lot more space for your money if you are willing to buy a house that needs some work. I’m not talking about the dreaded “fixer” that needs to be torn to the studs. There are lots of houses out there that need serious cosmetic updates such as pulling out old carpet, painting cabinets, swapping counter tops and landscaping. These fixes may seem like a lot of work, but they may not actually cost you that much – and if the house has good bones, you have the potential to really increase the value of the property.

Start with a Condo

Most buyers have their hearts set on getting into a single-family home. However, if you aren’t willing to compromise on size or condition, you might find that you are able to get much more for your money if you consider a condo or townhome. The downsides to taking this route are that you typically don’t have your own yard, and you have to factor in HOA dues when considering price. But going this route might allow you to get the space you want in your top neighborhood.

Keep in mind that if you are a first time homebuyer, you are likely not looking for a “forever” home. They are called “starter” homes for a reason! Once you get into the market and start making equity, you can think about your long-term goals and hopefully devise a plan to get you on the right path to your dream home.