New Housing Permits Drop to 8-Year Low in Southern California

Southern California’s construction industry has been hit hard by the state’s shelter-in-place orders, resulting in an eight year low. For the second quarter of 2020, new housing permits were down 27% in a year, according to Whittier Daily News. For Los Angeles, Orange, Riverside, and San Bernardino counties, only 7,505 permits were filed by builders during the quarter. This marks the slowest quarter since the end of 2012. New home sales were down 13% in the same counties, but existing home sales dipped down 34%. There may be hope on the horizon as local builders have reported an increase in demand.

Builders in Riverside and San Bernardino counties got 26% more signed sales contract in June vs. a year earlier, according to Meyers Research. But in Los Angeles and Orange County pending sales fell 19%.

“The housing market in the Inland Empire is stronger than the local unemployment rate would suggest due to more people working from home,” says Meyers analyst Ali Wolf. “Many have realized they can get more bang for their buck by moving inland as long as they aren’t planning on commuting every day.

In Los Angeles and Orange counties, Wolf says builders face the loss of Chinese buyers who favored luxury new homes plus the region’s high land costs that make selling lower-priced housing “as challenging as ever.”

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