For those looking to put their housing budget together, coming up with a number is important. Of course, most of the data that’s often discussed in the media when it comes to housing prices is tied to the median house. Right now, the median house in the U.S. sells for roughly $412,000 as of the second quarter of this year. But as many readers will already tell you, the average is much higher, and it’s skewed by many coastal markets which sport median housing prices that are much, much higher.

The Los Angeles real estate market is certainly on the list of the most expensive areas to choose to be a homeowner. This sprawling metropolis is known for its sun-drenched beaches and rolling hills, but living in this urban eutopia comes in with big price tag. Thus, I thought it would be fun to dive into a thought experiment, and consider how much a million dollar budget will afford the average homebuyer in L.A.

Let’s take a look at what it may take to find yourself a resident of a celebrity-studded neighborhood (or even a more modest neighborhood) in Los Angeles.

Key Points About This Article:

• The Los Angeles real estate market is among the most expensive in the United States, meaning homebuyers need to have quite a large budget when starting the house-hunting process.
• Here’s what investors can expect with a $1 million budget in the L.A. market. 
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Overview of the Greater L.A. Housing Market

Greater Los Angeles is truly a massive market, with a rather diverse range of neighborhoods, each with their own vibes, culture, landscapes and varying real estate prices. Thus, like looking at America as a whole, trying to discern what a median property will cost in L.A. really doesn’t tell that great of a story. 

From sleek condos to charming mid-century homes tucked away on quiet streets, the Los Angeles real estate market varies widely by a number of factors. Whether it’s the proximity to downtown and great jobs and shops, the coast, or entertainment and tourism districts, there are plenty of factors that can go into the L.A. house-hunting process for those looking to get started. 

The median price for single-family homes in Los Angeles has surged in recent years, now at the highest level on record. In fact, many areas are now seeing typical homes valued at or above $1 million. The pandemic has intensified this trend, pushing homeownership further out of reach for many residents and potential new home buyers. 

Those looking to purchase a $1 million detached home in L.A. may be resigned to a home around 1,400 square feet, given the average price-per-square foot metric of $713 in the L.A. area. Again this can vary by district, and may change depending on density and the number of condo units and apartments in a given area. But that’s really not a lot of square footage for the value, especially when compared to so many other areas of the country.

Values Vary Depending on Neighborhood

Each neighborhood in Greater Los Angeles tells a different story of lifestyle and investment potential, particularly when you’re wielding a budget of one million dollars. Let’s break down what this amount might signify in three distinctly different areas.

For those looking to buy a home on the west side (Santa Monica or Beverly Hills, for example), $1 million won’t fetch much, if anything.  Of course, in these prestigious locals, the average cost per square foot is much higher. Finding a property in the $1 million range may really only be found in older properties with the need for plenty of attention, or attached dwellings. Good luck.

In central L.A. (downtown and Koreatown, for example), $1 million might stretch a bit further. Such a sum may fetch a modern condo or potentially a small house, complete with the amenities that cater to a more dynamic urban lifestyle. For those looking to take advantage of the hustle and bustle the city of L.A. can offer, this may be the best option from a budget perspective.

In the San Fernando Valley (Sherman Oaks, Encino and other areas), a million dollars will go a lot further. Now, many of the perks a homeowner would likely associate with living in L.A. (top-tier schools, high-end shopping, the social and cultural scene) may be harder to find in this suburban refuge. But it is possible to afford a larger home with a garden or even a pool, as these locales are located further away from the urban core. For those looking to raise a young family, this is often the preferred option due to the accessibility of parks, schools and shopping centers. It’s more my scene, but it’s not for everyone. 

Make Your Million Dollars Work For You

Understanding the L.A. real estate market can take plenty of time and energy, and I have to say that this piece is only scratching the surface in terms of what homebuyers can expect to see in various regions of L.A. when shopping with a $1 million budget. 

That said, finding emerging neighborhoods, seeking out fixer-uppers and consulting local experts are three pieces of advice I’ve heard from others that I think is worth passing on to readers. This is a difficult market (as is the case in many coastal cities). But with the vibrant social scene and so much going on, many find the experience of living in L.A. well worth the cost. Personally, I think the weather is fantastic and this is a market that’s certainly worth visiting at least once, no matter what the local news stations says.

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