Although the prices are some of the highest in the country, new-home sales in Los Angeles/Orange County have far exceeded expectations this year, according to the Zonda data team.
The metro's average new-home sales rate is down moderately from the same time in 2021 and up notably from the same time in 2019, making it one of only about a half-dozen large markets nationwide where the average sales rate is much higher compared with four years ago.
Average detached and attached new-home list prices have found some steadiness this year and continued month-over-month gains into early summer. The rates of year-over-year job growth for the state and the region have slowed noticeably over the past 12 months and have run about even with the U.S. since late 2022.
Resale active listings are down nearly 60% compared with pre-pandemic 2019, one of the largest decreases in the U.S., giving builders in the market plenty of advantage. Orange County had the fifth highest average home equity per borrower in the U.S. in the first quarter at $774,000.
Months of supply of vacant developed lots is relatively unchanged year over year and about half the market's equilibrium point, keeping lot prices high. Annual starts and annual closings continued to decline in the second quarter, and closings have outweighed starts in volume since late 2021.
Quarterly housing starts decreased 6.8% from a year ago, while the number of available vacant developed lots sits at 4,474, down 18.8% from the same quarter last year. In terms of supply/demand balance, the market area is 1.55% undersupplied.
New-home sales in the Los Angeles-Long Beach-Anaheim metropolitan area decreased 16.2% year over year to an annualized rate of 4,941 units in June. Over the past 12 months, 2,512 of sales were attached units and 2,429 were detached. Existing-home closings for the 12-month period ending in July posted a year-over-year decline of 41.4% to an annualized rate of 70,606 units. Of those, 20,335 were attached units and 47,957 detached.
The average list price for a new detached home in the Los Angeles-Long Beach-Anaheim region decreased 6.4% from 2022 to $1,540,370 in July, while the average list price for a new attached home decreased 31.2% over the same period to $886,319. Homes priced over $950,000 experienced the most closing activity over the past year. The new-home affordability ratio for a detached home reached 14.8% in June.
Total nonfarm employment in the metropolitan statistical area increased 2.5% from the same period last year to 6,355,200 payrolls in May, with approximately 12,600 more jobs compared with the previous month. The local unemployment rate remained flat at 4.5% in May. Zonda forecasts the region's unemployment rate will finish the year at 4.6%.
The current population for the Los Angeles-Long Beach-Anaheim metropolitan area is approximately 12,961,090 people and is projected to increase by 0.1% this year. There are approximately 4,471,870 households in the region, which is up 0.5% year over year. Forecasts show that current household formation is expected to increase by an annual growth rate of 1.8% for 2028. Incomes increased by 4.5% from the previous year to $90,471.