Right now, you can buy a house in 90% of the country for under $350,000. In almost HALF the country, you can buy one for less than $150,000.
So why are we all fighting tooth and nail to own a piece of L.A.?
One of the reasons is potential appreciation - a $150K home in Ohio will likely be worth $170K in ten years. But that $1.2mil home in Eagle Rock might well be worth $2mil in the same time frame.
It's slightly counter-intuitive and worth repeating - expensive homes appreciate faster and higher than inexpensive ones.
Another way to phrase it would be buy in areas that have a multi-decade track record of appreciation and desirability, because those trends will likely continue.
Or…buy the worst house on the best block because the block is more important than the house.
And yes, home appreciation is forever. We will see a $1billion house in L.A. in our lifetime - it's not a huge stretch - there are $200mil homes in Malibu and Beverly Hills right now.
House prices in L.A. only topped $1mil in the early 1970s! In Beverly Hills, naturally.
I think eye-popping gentrification might be a relic of the easy-money era. Asking “what's the next hot neighborhood" might be an outdated strategy.
I'd sooner bet on A+ areas going supernova and turning into A++ areas. My suggestions next week.
Also. Thanks, dad.