Los Angeles is one of the most expensive cities to live in the United States, and there are several factors that contribute to this. Taxes imposed on residents and businesses are high, with a 9.5% sales tax, which is among the highest in the country. Low vacancy rates over the past decade have also driven up housing costs. Investors from the United States and other countries, such as China, are attracted to Los Angeles real estate due to its strong economy and high growth rate in terms of employment.
Proposition 13, a voting initiative that limited the amount local governments receive from property taxes, has had an adverse effect on the housing market. Additionally, labor and raw materials for construction projects are more expensive in California than in other states. The weather in Los Angeles is another factor that drives up prices. With an average of 284 days of sunshine per year and an average temperature of 63.7 degrees Fahrenheit, it's no wonder people are willing to pay a premium for a home here.
Plus, with access to all types of climates without leaving the state, it's a great place to live. The opportunity that Los Angeles offers is also a major draw for people looking to invest in real estate. There are many high-paying jobs and big companies here than in other parts of the country, which leads people to move here and pay more for housing. Dick Platkin, a former Los Angeles urban planner, reported that nearly 60 percent of Los Angeles businesses in a recent University of Southern California survey said the region's high cost of living was affecting employee retention.
The more money you have to spend on a home in Los Angeles, the more options you have to buy, with less competition. Every new home built in the Los Angeles area must meet strict earthquake building regulations. Unless someone discovers some hidden piece of land on which tens of thousands of homes can be built quickly, there is little reason to expect a slump in the Los Angeles housing market. Los Angeles also hosts thousands of people who earn more than a million dollars. When he sold his home in the greater Los Angeles area and moved to a new retirement home, it was during the housing recession of the 90s in SoCal. The only other thing that could really cause a crash in the Los Angeles housing market would be a wave of coronavirus-related foreclosures. Finally, while Los Angeles has a robust mass transit system known as the Metro, only about 7% of the population takes advantage of buses, trains and light rail.
