Los Angeles Housing Market Past, Present, and Paths Forward Alexander Casey Senior Policy Advisor Zillow Group Economic Research ZILLOW ECONOMIC RESEARCH
High home values nothing new, yet now historically high 2 Source: Zillow Home Value Index, December 2019 ZILLOW ECONOMIC RESEARCH
LA follows national trend of dwindling for-sale inventory 5 year inventory decline 3 Source: Zillow For-Sale Inventory, January 2020. ZILLOW ECONOMIC RESEARCH
Lowest-value homes in LA County appreciating fastest Growth since Growth since pre-recession Recession low $999,181 peak Top Tier Middle Tier 10.2% 69.4% Bottom Tier $590,824 $650,222 8.1% 75.6% $411,522 12.2% 88.8% $363,659 $244,471 4 ZILLOW ECONOMIC RESEARCH
Strong recovery drives down negative equity in LA, but scars of high foreclosure rates still linger. 5 Source: Zillow Negative Equity, 2018 Q2 and Zillow Foreclosure Re-Sales %, December ZILLOW ECONOMIC 2019. RESEARCH
Entry-level homes hit especially hard by the foreclosure crisis in the LA metro Share of foreclosed homes that are entry-level , middle-tier and high-end 6 Source: Zillow analysis of foreclosed homes between the beginning and end of the ZILLOW ECONOMIC bust. RESEARCH
Homes located in communities predominately of color were hit the hardest by the foreclosure crisis 7 ZILLOW ECONOMIC RESEARCH
Rental values on a steady rise across LA County 8 ZILLOW ECONOMIC RESEARCH
In some parts of the LA metro rents have remained relatively level the last five years 5 Year Change in Rent < 10% 10% - 20% 20% - 30% 30%+ 3 ZILLOW ECONOMIC RESEARCH
In many ZIP codes, rents are rising alongside national pace during the past five years 5 Year Change in Rent < 10% 10% - 20% 20% - 30% 30%+ 4 ZILLOW ECONOMIC RESEARCH
But across most of the region, rental prices have significantly outpaced the nation 5 Year Change in Rent 5 Year Change in Rent < 10% 10% - 20% 20% - 30% 30%+ 5 ZILLOW ECONOMIC RESEARCH
Pockets of exceptionally hot rent appreciation within Los Angeles 5 Year Change in Rent < 10% 10% - 20% 20% - 30% 30%+ 6 ZILLOW ECONOMIC RESEARCH
High incomes don’t fully cover for high burdens 10 ZILLOW ECONOMIC RESEARCH
20 ZILLOW ECONOMIC RESEARCH
21 ZILLOW ECONOMIC RESEARCH
22 ZILLOW ECONOMIC RESEARCH
Share of income necessary for typical rental at historic high Historic average, 1985-2000 Source: Zillow Rent Affordability, 2019 Q3. 17 ZILLOW ECONOMIC RESEARCH
Affordability pinch most severe on the lower-end of the market 18 ZILLOW ECONOMIC RESEARCH
As the share of income spent of rent rises, fewer people save any income 24 ZILLOW ECONOMIC RESEARCH
Findings from: Inflection Points in Community-Level Homeless Rates Chris Glynn, Thomas H. Byrne, and Dennis P. Culhane In partnership with Zillow 20 ZILLOW ECONOMIC RESEARCH
In Los Angeles, episodes of homeless on the rise, bucking national trend Predicted count 73K Point in time count 33 ZILLOW ECONOMIC RESEARCH
When a community reaches an affordability tipping point, the link between rent burdens and homeless rates grows stronger 34 ZILLOW ECONOMIC RESEARCH
If rent affordability worsens, the model predicts an increasing homelessness count District of Columbia CoC Predicted change in homeless count 104 If share of income needed to rent a home increases… 38 ZILLOW ECONOMIC RESEARCH
And in Los Angeles this link is even stronger Los Angeles City & County CoC Predicted change in homeless count 11,59 1 104 District of Columbia CoC If share of income needed to rent a home increases… 39 ZILLOW ECONOMIC RESEARCH
Paths forward on housing affordability I. Address housing supply shortage II. Protect and boost incomes of economically vulnerable 25 ZILLOW ECONOMIC RESEARCH
Public policy has the capability to: Address housing supply shortage I. Influence cost of production I. Incentivize certain types of housing II. III. Fund/build it directly Protect and boost incomes of economically II. vulnerable ZILLOW ECONOMIC RESEARCH
In many high-priced metros, significantly more new jobs came to town than new housing units were built 27 ZILLOW ECONOMIC RESEARCH
Home building behind historic average 28 Source: U.S. Census Bureau: New Residential Construction ZILLOW ECONOMIC RESEARCH
Cities with the most land use restrictions see their home values grow faster when new jobs come to town Los Angeles, CA 29 ZILLOW ECONOMIC RESEARCH
Public policy has the capability to: Address housing supply shortage I. Influence cost of production I. Incentivize certain types of housing II. III. Fund/build it directly Protect and boost incomes of economically II. vulnerable ZILLOW ECONOMIC RESEARCH
Building 1 ZILLOW ECONOMIC RESEARCH
Building 2 ZILLOW ECONOMIC RESEARCH
Building 3 ZILLOW ECONOMIC RESEARCH
Mild density housing options important source of low-cost housing in Los Angeles metro 34 ZILLOW ECONOMIC RESEARCH
Even modest densification can greatly impact supply shortage How much housing could modest densification add? Los Angeles-Long Beach, CA CSA Homes in 2040 (millions) 35 ZILLOW ECONOMIC RESEARCH
Public policy has the capability to: Address housing supply shortage I. Influence cost of production I. Incentivize certain types of housing II. III. Fund/build it directly Protect and boost incomes of economically II. vulnerable ZILLOW ECONOMIC RESEARCH
Public policy has the capability to: Address housing supply shortage I. Protect and boost incomes of economically II. vulnerable Rectify imbalance between need and funding I. Improve efficiency of subsidies II. Maintain control of affordable stock III. Administer rehousing and supportive housing IV. programs ZILLOW ECONOMIC RESEARCH
Rental assistance often a lottery for a lucky few ZILLOW ECONOMIC RESEARCH
Public policy has the capability to: Address housing supply shortage I. Protect and boost incomes of economically II. vulnerable Rectify imbalance between need and funding I. Improve efficiency of subsidies II. Maintain control of affordable stock III. Administer rehousing and supportive housing IV. programs ZILLOW ECONOMIC RESEARCH
Most units affordable for voucher holders in high- poverty neighborhoods 40 ZILLOW ECONOMIC RESEARCH
Public policy has the capability to: Address housing supply shortage I. Protect and boost incomes of economically II. vulnerable Rectify imbalance between need and funding I. Improve efficiency of subsidies II. Maintain control of affordable stock III. Administer rehousing and supportive housing IV. programs ZILLOW ECONOMIC RESEARCH
ZILLOW ECONOMIC RESEARCH
Recommend
More recommend
