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The Real Deal Los Angeles

SoCal developers slash prices on new homes amid oversupply: Zillow

Largest inventory of unsold homes in 6 years
January 21, 2019 02:00PM

(Credit: Pixabay)

Facing the largest inventory of unsold homes in six years, home builders in Southern California have started to slash their prices. The move was another example of what market pros are calling a slowdown in the greater housing market.

Property owners and developers cut prices on 25 percent of new homes in Los Angeles and Orange counties, and 28 percent of new homes in Riverside and San Bernardino counties, according to Zillow’s fourth quarter market report, cited by the L.A. Daily News.

At the start of 2018, the price cuts amounted to 19 percent and 27 percent of new homes in those regions, respectively. A recent report found a similar slowdown in new home sales in the Southern California area.

The cuts mirror a nationwide trend, as 25.1 percent of new homes saw reduced prices at the end of the year, up from 19.2 percent at the start of the 2018.

Housing tracker MetroStudy found at the end of the third quarter, 3,401 new homes were unsold in Southern California — up 14 percent in 12 months. That was the highest inventory level since 2012.

As a result, Southern California builders made some of the deepest price cuts seen nationwide, and the National Association of Home Builders confidence index for the region started this year at 70, down from 83 last year. [LADN]Gregory Cornfield