New homes in L.A. cost less per square foot than existing ones

New homes in the Los Angeles area and across the nation are now generally cheaper per square foot than existing homes, according to a new report from Zillow .

The online real estate marketplace found that the median sale price of a newly constructed home in the L.A. metro area was $1.15 million in May. An existing home costs less, at $970,000, but the new homes are $52 cheaper per square foot.

Nationally, Zillow found that new homes sold for $3.50 less per foot than existing homes in May, marking the most significant discount in at least six years.

The data represents a “relative bargain for shoppers focused on getting the best value for their money on livable space,” Zillow said.

Price per square foot difference for new vs. existing homes by city

The discount for new vs. existing homes isn’t true for every U.S. city. For example, new homes in San Jose, California, are $216 more expensive per square foot than existing homes. In San Francisco, the gap is $137.

Price per square foot difference for new vs. existing homes by city

Prior to the pandemic, new homes nationally ranged from $15 to $22 more per square foot than existing homes, the report stated.

“Builders have shifted to build smaller homes on smaller lots to appeal to affordability-challenged buyers,” according to Zillow.

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