Most homebuyers enjoy looking at real estate, particularly in character-rich Northeast Los Angeles. But first you need to sort out your financial ducks.

It’s no secret that Northeast Los Angeles is a hot real estate market. For many years, real estate in Highland Park, Eagle Rock, and Pasadena has always been in high demand. Homes in Glassell Park, Hermon and Garvanza continue to command top prices. Everyone is trying to grab their piece of the American dream of home ownership.

But some interesting facts about home prices, rental prices, and home ownership rates with younger people in the Los Angeles area should be seriously considered by young people and couples who are sitting on the fence. buying a house in 2017 and 2018.

The short story is that property and rental prices are going up, property rates in Los Angeles lag the rest of the country, and low interest rates mean mortgage payments are lower right now compared to other periods in the recent past.

Since 2007, home ownership has dropped from 52.3% to 47.8% (in 2016), according to data compiled by Apartment List. Those least likely to be homeowners today are African-Americans, Hispanics, and people under the age of 45. (For what it’s worth, overall property rates fell 8.1 percent in San Diego.)

Another set of statistics (collected by Lending Tree) found that 36 percent of Millennials were homebuyers. Ownership is highly correlated with income and savings, so for those who think they could, here are four critical steps to make it happen:

Estimate when you’re most employed/creditworthy: You want to show a lender your best creditworthiness, which is a function of total income (both salaried), debt-to-income ratio, and your overall credit score. If either partner plans to take time off or reduce their work hours, such as having children or going back to school, it’s wise to get a mortgage before making that move.

Know your financial parameters: You simply need to know how much you can afford. List your monthly expenses, your monthly income and pay special attention to what your monthly housing expenses are (calculation of utilities and insurance). Then meet with a mortgage broker or real estate agent to use that information to figure out what size mortgage you can afford. There are several terms in each mortgage (ie, number of years, interest rates, down payment amount, and closing costs) that will affect the amount of your monthly payments.

Find your down payment: It will be 10-20% of the purchase price, or more if you have it. We have a $600,000 house, that means you’ll need up to $50,000. We’ll leave it up to you to determine where it comes from (often it’s the parents or grandparents who understand the good sense of owning over renting).

Plan for 4-6 years: Because there are transaction costs associated with buying a home, there is a break-even point for all purchases (assuming the market appreciates) where you can see a profit if you decide to sell. Real estate appraisal firm Zillow in 2015 calculated the “break-even horizon” in the Los Angeles region at an average of 5.1 years. But this comes with variation. Zillow’s analysis found numbers for several Northeast Los Angeles neighborhoods that hovered around this average:

Eagle Rock 6.3 years

Highland Park 4.8 years

Hermon 4.5 years

Glassell Park 5.5 years

Mount Washington 6.1 years

Note that other areas have longer break-even points, such as Atwater Village (7.4 years), Silver Lake (8.3 years), Los Feliz (8.9 years), and South East Pasadena (9.1 years). . There were no numbers available for Garvanza, another popular NELA area.

Without a doubt, it is a process that requires planning, saving and organization. But for most people, a home is also the biggest investment of their lives. There should be a bit of work involved.