New home closings in the Los Angeles, CA market dropped year-over-year in August, and the percentage fall, which was steeper than July 2015, gave signals that the market may be worsening. New home closings saw a drop of 22.0% from the year earlier to 469. This was after the housing market saw a 11.2% fall year-over-year in July.
A total of 6,300 new homes were sold during the 12 months that ended in August, down from 6,432 for the year that ended in July.
Out of all housing closings, new home closings accounted for 4.2%. This is a drop 5.7% of closings a year earlier. Closings of new and existing homes increased year-over-year in August after also rising in July year-over-year.
Pricing and Mortgage Trends
The average price of new homes was $892,586 per unit in August, up 8.3%from a year earlier. This gain compares to a 5.5% fall in July from a year earlier.
Average mortgage size on new homes increased year-over-year along with new home prices. In August 2015, average mortgage size increased 8.3% from a year earlier to $603,022. Average mortgage size went from $553,335 in July 2014 to $554,246 in July 2015.
Other Market Trends
Closings of attached units, as a percentage of new home closings, have risen from last year while closings of single-family homes have slumped. Attached unit closings jumped from 27.8% of all closings in August 2014 to 31.1% of closings in August 2015. Conversely, the share belonging to single-family homes declined to 68.9% of closings from 72.2% of closings.
There was a 9.9% decline year-over-year in the average unit size of newly sold homes to 2,411 square feet in August 2015. The average size of newly sold homes moved from 2,660 square feet in July 2014 to 2,518 square feet in July 2015.
Foreclosures and real estate owned (REO) closings continued to decline from a year earlier in August, but did not appear to be dragging the market. Together, foreclosures plus REO closings accounted for 10.6% of existing home closings, down from 11.6% a year earlier. The percentage of existing home closings involving foreclosures went from 5.5% in August 2014 to 4.7% in August 2015 and REO closings moved from 6.1% of existing home closings in August 2014 to 5.9% in August 2015.