Total new-home closings: 6,906
Population: 13,262,220
The good: The average sales price among new homes has risen from $537,901 in February 2013 to $708,852 in February 2015.
The bad: Resale properties stole 12% of the total market over a two-year period, as less than 30% of buyers can afford new homes.
The bottom line: With an 11.1-month vacant developed lots inventory and peak sales occurring at the $1M mark and above, there's money to be made in this market.
As prices rise beyond the reach of nearly one-third of the area's population, the new-home market surrounding Los Angeles continues to cool in 2015. Year-to-date permit figures dropped in March 2015 year over year by 12%, as the resale market squashed new sales over a 12-month period ending in February, expanding from 68% to 80% of market share. With the number of vacant developed lots in Los Angeles County rising to a monthly supply of 11.1 months, the issue isn't in finding lots on which to build so much as it's finding qualified buyers. From the fourth quarter of 2014 to the first quarter of 2015, closings decreased by 11%, but starts prove that builders aren't giving up—they increased by a whopping 36% over the same period. Based on sales statistics, the greatest success should come from prices of around $425,000 and over $1M.
