Some observers in the housing industry would not hesitate to mention South California when asked about the most competitive real estate markets. But despite the rising house prices and fierce competition, a new one report by John Burns Research & Consulting (Jbrec) says it’s time to close the curtain to the story “California Exodus”.
Scott Wild, senior vice president of Consulting at JBREC, issued a report from the housing market in South California this week in which he took an optimistic position on the prospects for Los Angeles, San Diego, Orange County, the Inland Empire and the Surrounding areas. According to Wild, South California still remains competitive with other large American markets despite its higher prices and low supply.
“Although affordability is a huge challenge – especially with mortgage interest rate against 7% – the region continues to perform better than Sunbelt -markets such as Texas and FloridaWhere an abundance of new houses and investor has led to price corrections, “Wild wrote in the report.
The most important housing markets of California continue to thrive in two ways despite higher prices and mortgage interest. JBREC emphasizes the growth of jobs as the first measure of measuring the future. According to the report, recent data from job growth in South California “exceeded expectations” despite already existing labor deposits. A prediction from the The Employment Development department in California (EDD), for example, calls for jobs in business and professional services to increase 20.5% between 2020 and 2030.
In the short term, employment can still suffer because of the LA Wildfires – something that Jbrec does not emphasize in the report. The Los Angeles Times reported That 5,300 employees submitted unemployment claims that were linked to the fires, about 10% of all claims that were submitted in the state last week. And the unemployment rate of California was 5.5%in December, the highest of all states with the exception of Nevada, so the expected growth may not be fast enough to make an impact.
Migration to the South California region is also expected to increase. For the past two years, JBREC mentions data about new residents moving to the state.
“Although more and more households in this region are unreachable in home ownership, the trend of migration has reversed. The population of all major subways in South California has increased over the past 2 years and we expect it to continue to grow in 2025, “the report said.
JBREC said that apartment and build-to-interest (BTR) communities in the area are increasingly occurring as an option for commuters and external employees. But new apartments do not get on the market as before. Facts from the Los Angeles Department of Building and Safety showed that 3,860 apartments were allowed during the first 11 months of 2024. That is a lower than 6,148 during the same time frame in 2019.
JBREC pointed out that BTR communities go inland to prevent market problems that penetrate coastal markets. The Inland Empire, which includes cities such as Riverside and San Bernardino, has added 1600 BTR units in the last two years, according to JBREC. Another 2,900 units are under construction – comparable to figures in Nashville and Indianapolis.
The report also mentions changing home preferences as an important engine of market growth in South California. It said that observers “should expect home builders to concentrate on fire resistance as one of the strongest sales arguments for new houses.” Wild points out that California lies for other states in the field of energy efficiency and home design.
