In December, the Los Angeles, CA market saw a fall year-over-year in new home closings, and there were suggestions of weakening market conditions with a percentage fall steeper than that of November 2014. New home closings saw a decline of 24.6% from the year earlier to 636. This followed a 13.8% drop year-over-year in November.
A total of 6,534 new homes were sold during the 12 months that ended in December, down from 6,742 for the year that ended in November.
New home closings represented 6.9% of overall housing closings. This is a drop 8.2% of closings a year earlier. For new and existing homes, closings slid in December after also declining in November year-over-year.
Pricing and Mortgage Trends
For newly sold homes, the average price climbed 24.9% year-over-year in December to $952,778 per unit. This boost is higher than the 18.4% lift in November year-over-year.
The average mortgage size on newly sold homes saw a rise year-over-year along with new home prices. In December 2014, the average mortgage size on newly sold homes saw a 21.7% hike from a year earlier. In November 2014, average mortgage size rose 15.9% from a year earlier.
Other Market Trends
Single-family homes accounted for a greater percentage of new home closings than last year. Single-family home closings increased from 55.2% of new closings in December 2013 to 65.9% of closings in December 2014. At the same time, the share of new home closings belonging to attached units dropped to 34.1% of closings from 44.8% of closings.
For all new homes sold, the average unit size sank 30.2% year-over-year to 1,799 square feet in December 2014. This decline was opposite the price lift, a pattern also seen in November 2014 when the average size of newly sold homes declined 7.3% to 2,366 square feet. In November, the average size of new homes sold went from 2,553 square feet a year earlier to 2,366 square feet.
Foreclosures and real estate owned (REO) closings continued to drop from a year earlier in December, but did not look to be a burden on the market. Combined, foreclosures plus REO closings represented 14.4% of existing home closings, below 16.3% a year earlier. The percentage of existing home closings involving foreclosures went from 7.0% in December 2013 to 6.9% in December 2014 and REO closings as a percentage of existing home closings dropped to 7.5% from 9.3% a year earlier.
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Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed
“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”