Why People are Moving to the City of Angels from the Big Apple

In my experience of hosting numerous open houses, I would say that about 90% of my open houses I meet at least one person moving to Los Angeles from New York City.  Recently I visited New York City, where I had the opportunity to explore the Big Apple and all that it has to offer.  It is truly an amazing city and I can see why it is so desirable.

After coming back, I reflected on why we are seeing such an influx of people.  I have come up with four reasons why this may be the case:

1. Los Angeles has much of what New York has to offer: With the exception of the Statue of Liberty and the Brooklyn Bridge, L.A. has much of what New Yorkers will want in terms of lifestyle.  This includes hip restaurants, art galleries, museums, and the theatre.  There isn’t as much to sacrifice.  That also takes into account an easily accessible international airport.  If you need to fly somewhere, LAX can get you there, without having to make multiple stops.
2. Los Angeles has far better weather: No snow, and sunny much of the year.  If a New Yorker wants to wear shorts almost all year round or go to the beach in October, this is the place to be.
3. Rents are much less: According to CNBC, the average one-bedroom home rents for $3,680/month in New York City.  Compare that to Los Angeles at $2,030/month.  That makes it enticing for those wanting to live in a major city, but can’t afford the rents.
4. Buying is a whole other story: It is hard to compare housing, as New York City is an urban jungle, with little to no single family homes in the immediate area.  This is much different than in Los Angeles where you can get a single family home, and still be close to the action.  But even taking that into account, buying in New York is going to cost you a pretty penny.  Fortune reported in December of 2016 that a Manhattan apartment (what we in LA call condos) now costs an average of $2,000,000.  Come to Los Angeles, you can single family homes that are larger, with no HOA dues, in the same range.  Now, even though I found units listed for much less, you have to keep in mind that the Home Owners Association dues are also much higher on average because most cover expenses such as doormen and property taxes (if it is a co-op) on top of the normal expenses.  Daily News reported that average association fees are in the range of $1,500/month.  In Los Angeles, if you are willing to forgo the doorman and concierge, you can find units with HOA dues in the range of $400-$500/month.  This can make it or break it in terms of qualifying for financing since that is taken into account.

So what does that mean for Los Angeles?  It means we are going to see a growth in population, but not necessarily a growth in homes available.  This can drive prices up as competition grows.  And if those New Yorkers are bringing their incomes from there to here, it means they can, and will, compete and possibly drive prices up.