One thing that's jumped out to some readers about the unfolding civil fraud allegations tied to public funds directed by Orange County Supervisor Andrew Do: What (or really, how little) $1 million buys you here in Southern California.
Or as one commenter on our Instagram post regarding the recent account of the home's purchase by the supervisor's daughter, Rhiannon Do, said:
"I can't believe that's a million-dollar house."
To which another person responded:
"That's the real crime here."
Welcome to the harsh reality of the California real estate market.
Rhiannon Do was a 22-year-old, full-time law student at UC Irvine when she bought the home in unincorporated Tustin last summer for $1.035 million.
It offers three bedrooms and two baths, with about 1,700 square feet of living space, according to an online listing.
A few of you had thoughts:
One of our readers asked: "Which is more disgusting: the [alleged] fraud or the fact that a starter home is costing 1 million these days?"
Sad, but that's the going rate
Lexi Newman, a realtor with Compass, said the price is no surprise to anyone familiar with the local market. Newman has been in real estate for more than a decade, and focuses on properties in Northeast Los Angeles.
Newman said that as of August, the median sale price in greater Los Angeles for all types of properties was more than $1 million; about $1.2 million in Orange County. In the city of Tustin, it was $1.4 million. According to a Harvard University report from the summer, homes in L.A. and Orange counties are now 10 times more than the median family income of the region.
"Prices really skyrocketed during the pandemic very quickly," Newman said. "For people who maybe haven't been active in the market for a long time, I think it's very hard to reconcile what you actually get for a million dollars and the quality of the home that a million dollars can buy."
She said even if a house is listed at $1 million, the sale price is frequently above that.
"A lot of times, things are priced low and something that's priced for a million dollars may actually go for $1.2, $1.3 [million]," Newman said.
So what does $1 million buy you in SoCal?
Even at that price tag, what kind of spread you'll get varies.
"Depending on what kind of neighborhood you're looking in, you're going to get a small, probably like a two bedroom, maybe two baths or one bath. It might need some repair work, maybe kind of an original 1920s that hasn't been updated for a while," she said.
The lack of housing inventory has been a driver behind high prices for as long as Newman can remember. But she said the pandemic — which boasted historically low interest rates for borrowers — supercharged the imbalance between sellers and buyers.
She doesn't expect any change to this equation anytime soon. Prices will likely remain high, and inventory low.
One factor, Newman said, that could give buyers a bit more buying power is if the Federal Reserve continues to cut interest rates.
"The more that rates come down, the more your money stretches," she said. "So if you are getting a loan, you're going to be able to qualify for a higher purchase."
Bottom line: little relief is in sight
Even then you're probably still staring at home prices northward of $1 million in many parts of SoCal.
It's a shock to the system, especially compared with what $1 million could get your elsewhere in the country, Newman said.
"Because I'm a real estate person, I'm always looking at what real estate costs." she said, who recently took a trip to Michigan. "We were driving around in Detroit, and we saw the biggest mansion I've seen in my life. It was just this gorgeous, insane, like, 12 bedrooms, eight baths. It was the most beautiful home I've seen."
To be exact, the 10,000 square feet house had seven beds and seven baths.
The selling price? A measly $1.3 million.
