California E&S Insurance

Why buy a condo in LA? Let's assume you have 100k down payment for the 650k 2 bed condo, your HOA will be $700/mo and your propery taxes will be $650k x 1.25% ~ 8k a year, and you plan to retire in 2050. Roommates is not an option. Historical data shows that a home in LA appreciated on average 5.3% a year over a span of 25 years, so with the conservative 4% yoy average increase the condo could appreciate to $1.6m in 2025. The $500 home loan with the 7% interest assumes that you will end up paying $1m of principal and interest by 2025 and 400k to 600k in property taxes and HOA fees. So you'll be close to just breaking even with a conservative appreciation rate. On top of that, there's wear and tear and home owner insurance, which wont cover wildfires. The mortgage for the condo in question will be $6,500/mo vs $3,200 rent and if you put your 3.3k/mo savings in the market at a very modest average 6% return you will have made $2.3m. to make it even more of a head scratcher, some condos show 1-2% average yoy historical appreciation over a 20 years period. So why buy a condo as a middle class man in LA?

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