Why L.A. condo sales have slumped to a 20-year low | Real Estate news

Even as the relentless rise in Los Angeles housing prices appears to have paused, condominium sales slowed to a trickle this yr.

The quantity of condo items offered in the first two months slid to a more than 20-year low, according to figures from real estate data firm Attom. The median price of a condo fell practically 5% in February in contrast with a yr earlier, the property info supplier said.

Cooling condo sales could also be an early signal of broader weak point in the market.

Stubbornly high home-loan charges, a decline in the construction of new items, and financial angst are all retaining people and property builders from doing more offers, said Richard Green, director of the Lusk Center for Real Estate at USC.

“When the housing market softens, and it has, condos usually go softer faster than single-family homes,” he said. “People prefer single-family houses to condos.”

The median price of a Los Angeles County condo fell 4.5% in February, in contrast with a yr earlier. The median price of a single-family home fell 1.6%.

Median rents in L.A. not too long ago fell to a four-year low, a small signal of hope for tenants who felt prefer it was only a matter of time before they have been priced out of town.

Condos, like other properties, shot up in worth earlier in the pandemic but have been shifting sideways in L.A. for the last two years, with the median price meandering around $700,000 for a two-bedroom condominium.

“The market is experiencing more of a pricing plateau than a major correction,” said Rob Barber, chief govt of Attom.

Even as costs have flattened out, fewer offers are getting performed.

In January and February, fewer than 2,000 condominiums have been offered in Los Angeles County, according to Attom data. That is more than 40% fewer than a latest peak 5 years in the past, and the worst start to the yr since 2005, when Attom started amassing the data.

Unlike other big cities such as Miami, New York and Chicago, that are recognized for considerable condo selections, Los Angeles and other California cities have fewer choices, in half because many housing builders steer clear of building them.

Developers say California’s high prices of land and labor, as nicely as robust authorities rules, charges and taxes, have compelled them to stop building in the Golden State, even as costs have soared.

L.A.’s weak condo market is an element of a bigger development downside in which builders more and more favor rental flats — or keep away from the area altogether.

San Diego is a uncommon instance of a close by metropolis that has been in a position to persuade more builders to construct more.

The metropolis is more welcoming to builders, industry insiders say, with fewer rules and charges, better planning and less rent control.

In the last quarter of 2025, the quantity of new flats under construction in San Diego County rose 10% from three years earlier, CoStar data show. New residence construction in Los Angeles County tumbled 33% over the same period, hitting an 11-year low in the three months through December. San Diego is increasing its residence pool at practically twice the speed of L.A. and other major metropolis clusters in the state.

Condos are significantly robust for builders to invest in because California law permits householders associations, or HOAs, to sue builders for construction defects for up to 10 years after a building is accomplished.

It is common for an HOA to sue the developer as the 10-year statute of limitations nears, often for what builders think about minor or perceived points. Because of the high litigation risk, the insurance coverage premiums that builders pay for condo initiatives are often three to 5 occasions greater than those for an equivalent residence building.

Occupied residence buildings, meanwhile, are thought of stabilized property. A developer can construct them, fill them with renters, and then promote the whole building to an investor, such as a pension fund or a real estate investment trust, for a predictable revenue.

“If you sell it, you’re done,” Green said. “The multifamily market has been overwhelmingly a for-rent product for many, many years here in California.”

None of the six Southern California counties from Ventura County to San Diego County tracked by Attom noticed median condo costs rise yr over yr. The greatest drop was 8.6% in Ventura County in February from a yr earlier.

“Condo buyers tend to be more rate sensitive and are also dealing with rising HOA fees, insurance costs and stricter financing conditions,” Barber said. “At the same time, condo prices have remained relatively resilient, suggesting demand has cooled but not disappeared altogether.”

HOA charges have been rising with inflation and the maintenance prices of older buildings, making it harder for shoppers to buy condos.

“In California, it’s becoming clearer that they are more expensive to own than people think,” Green said. “We haven’t built much lately. The condominium market is generally older, 40- to 50-year-old places, and they need a lot of work. A lot of capital improvements are coming home to roost.”