Even though the continued rise in housing costs in Los Angeles has stopped, condominium sales have slowed this year.
The number of condo units sold in the first two months fell to a 20-year low, according to data from real estate data firm Atom. The property information provider said the average price of a condo in February fell nearly 5% from a year earlier.
Declining condo sales could be an early sign of broader market weakness.
Persistently high home-loan rates, a decline in construction of new units and economic worries are keeping people and property developers from making more deals, said Richard Green, director of the Lusk Center for Real Estate at USC.
“When the housing market softens, and it has, condos typically soften faster than single-family homes,” he said. “People prefer single-family homes over condos.”
The average Los Angeles County condo price fell 4.5% in February from a year earlier. The median price of a single-family home fell 1.6%.
The average rent in LA recently fell to a four-year low, a small sign of hope for renters who thought it was only a matter of time before they moved out of the city.
Condos, like other properties, increased in value earlier in the pandemic, but have been moving sideways in L.A. for the past two years, with the average price for a two-bedroom condominium hovering around $700,000.
“The market is experiencing more of a decline in pricing than a major correction,” said Rob Barber, chief executive of Atom.
Although prices have come down, there are still fewer deals taking place.
In January and February, fewer than 2,000 condominiums were sold in Los Angeles County, according to Atom data. That’s down 40% from the recent peak five years ago, and the worst start to the year since 2005, when Atom began collecting data.
A view of The View, a 16-story rental complex in San Pedro.
(Alan J. Schaben/Los Angeles Times)
Unlike other big cities like Miami, New York and Chicago, which are known for abundant condo options, Los Angeles and other California cities have fewer options, partly because many housing developers avoid building them.
Developers say the high cost of land and labor in California, as well as tough government regulations, fees and taxes, have forced them to halt construction in the Golden State, even as prices have risen.
L.A.’s weak condo market is part of a larger development problem in which builders increasingly prioritize rental apartments — or avoid the area altogether.
San Diego is a rare example of a nearby metropolis that has been able to convince more builders to build more.
Industry insiders say the city is more welcoming to developers with less regulation and fees, better planning and less rent control.
In the final quarter of 2025, the number of new apartments under construction in San Diego County increased 10% from three years ago, CoStar data shows. New apartment construction in Los Angeles County fell 33% over the same period, hitting an 11-year low in the three months through December. San Diego is expanding its apartment pool at nearly twice the rate of L.A. and other major city clusters in the state.
It is especially difficult for builders to invest in condos because California law allows homeowners associations, or HOAs, to sue developers for construction defects for up to 10 years after the building is completed.
As the 10-year statute of limitations approaches, it is common for the HOA to sue the developer, often for what the developers consider minor or perceived issues. Due to the high litigation risk, insurance premiums paid by developers for condo projects are often three to five times higher than for a similar apartment building.
Meanwhile, occupied apartment buildings are considered fixed assets. A developer can build them, fill them with tenants, and then sell the entire building to an investor, such as a pension fund or real estate investment trust, for a projected profit.
“If you sell it, you’re done,” Green said. “The multifamily market in California has been a hotbed of rental product for many years.”
None of the six Southern California counties from Ventura County to San Diego County tracked by Atom saw an increase in average condo prices year over year. The largest decline in Ventura County was 8.6% in February from a year earlier.
“Condo buyers are more rate sensitive and are also dealing with rising HOA fees, insurance costs and tighter financing terms,” Barber said. “At the same time, condo prices have remained relatively resilient, suggesting that demand has moderated but not completely disappeared.”
HOA fees are increasing with inflation and the cost of maintaining older buildings, making it harder for consumers to purchase condos.
“In California, it’s becoming clear that it’s more expensive to keep them than people think,” Green said. “We haven’t built a lot recently. The condominium market is typically an older space, 40 to 50 years old, and they need a lot of work. There are a lot of capital improvements coming home.”
