Home seekers round Southern California have been feeling profound sticker shock.
Median costs had hit data by no means seen earlier than.
First-time consumers have been desperately slapping down-payments on modest ranch properties in far-flung desert communities, enduring lengthy commutes simply to escape the rental market.
“We were lucky,” said one new homeowner who purchased a place in Tehachapi, 100 miles from her office in Chatsworth. “I don’t know if we’d still be able to afford it.”
Welcome to the loopy housing market of 2026?
No, attempt 2005.
It’s simple to take a look at as we speak’s steep median house costs — $885,000 in L.A. County and $1.19 million in Orange County, per Zillow — and say it’s by no means been worse.
But California has lengthy handled cycles of hovering costs that lock out folks with modest incomes. The final supercharged market in the early 2000s was fueled in half by ultra-liberal mortgages and lending that ultimately sparked the international housing disaster and recession, together with waves of house foreclosures.
Reforms have made lending extra stringent. That, together with rising costs, have altered the demographic of the California homebuyer over twenty years.
A bank-owned house in the Imperial Valley city of Heber is put up on the market in 2009 after the market crash that triggered the Great Recession the yr earlier than.
(Brian van der Brug / Los Angeles Times)
A altering homebuyer
A brand new evaluation from The Times reveals that the median homebuyer in the area has modified since 2005.
Among the findings:
- Homebuyers as we speak can afford extra, however they’re older and wealthier than they have been in 2005. Meanwhile, housing is much more out of attain for these in lower-income brackets.
- The common measurement of properties being bought in 2026 is barely bigger when put next with 2005.
- Homebuyers have a tendency to put more cash down than in the Wild West mortgage market of the early 2000s, presumably decreasing danger of foreclosures.
“The average California home buyer today looks very different than a generation ago,” California Assn. of Realtors President Tamara Suminski informed The Times in a written response to questions.
“Buyers are entering the market later, saving longer, and facing higher barriers to home ownership as home prices, mortgage rates, living costs, and years of limited housing supply continue to strain affordability,” she wrote.
Richer, older consumers
It’s removed from shocking that the demographics round shopping for a house have modified in 21 years.
In 2005, the median Southern California purchaser was 40 years outdated and introduced in an annual family revenue of $92,500, in accordance to information offered by the California Assn. of Realtors. In 2025 {dollars}, that was over $150,000.
The common house bought was 1,600 sq. ft and price $525,000. Adjusted for inflation, that might be almost $900,000 in as we speak’s {dollars}.
By 2025, the median purchaser had aged and seen an upward shift in revenue.
The 2025 common purchaser was absolutely 5 years older — 45, in contrast with California’s median age of 38. The purchaser took house $160,000 in annual family revenue.
And the house they bought price $820,000 on common, lower than the inflation-adjusted 2005 determine. The house was 1,700 sq. ft, simply barely larger than the median house 20 years prior.
Over time, house prices have risen greater than earnings, stated Michael Lens, a professor of city planning and public coverage at UCLA. However, the “mid to late bubble” ambiance of 2005 noticed comparably excessive prices.
“Part of [what happened in] 2005 was financial instruments fueling a building frenzy in places that didn’t have as much demand,” he stated.
As for top prices in 2025? “Since it definitely has something to do with scarcity, that means it’s more sustainable in good ways and bad than in 2005,” Lens stated. “That’s how that looks like a bubble and this looks like something else.”
More disciplined, larger down funds
So what has modified?
The revenue stage of the common purchaser has barely elevated relative to inflation. The common purchaser has gotten considerably older.
The affordability subject stems extra from the indisputable fact that wages haven’t saved tempo with price of residing will increase over these 20 years. Home costs have additionally eased up barely relative to inflation, regardless of a frenzy over the state’s affordability disaster.
New house building is underway in Pacific Palisades in February.
(Caroline Brehman / For The Times)
The median California family made round $100,000 in 2025, per census information. The common homebuyer earned about 60% above that determine. In 2005, the median family revenue was about $52,000 — which means that the median purchaser made 78% greater than the median Californian 20 years in the past. The hole between the common homebuyer and the common individual has truly decreased since 2005.
For these with decrease incomes, house purchases in Los Angeles County have been out of attain all through the twenty years, as those that made lower than the state median noticed their incomes develop considerably lower than these of high earners, per information from the Public Policy Institute of California.
Suminski described the 2025 consumers as resilient regardless of challenges: “They are more financially disciplined, building larger down payments, carefully managing their budgets, and entering homeownership on stronger financial footing than many first-time buyers of previous generations.”
Timing is everything
The 2000s are thought of a significantly loopy time for the California market.
Housing costs boomed early in the decade, fueled by financial restoration and low cost loans that allowed folks with shaky funds to buy properties.
“There are pretty well-documented ways in which it was too easy to buy a home, in part because of ballooning rates that snuck up on people,” Lens stated.
Today, “a homebuyer is gonna be different age-wise” and have larger earnings, he stated. “They’re not super young but they’re also not super old.”
“The rosy picture here is … that the burden is not as high, so that’s good news,” Lens stated. “But part of that is people waiting because the costs are high. Part of that is people waiting because people form households later in life than they used to.”
“If the price of housing goes up, then you have to wait longer and earn more to buy it.”