A declining supply of land available for new home development, combined with rapid new home sales, and a lack of political will to approve new home communities, has resulted in the number of active new home communities in Southern California plunging to one of the lowest levels in the past 30+ years. In addition to fewer projects, the average size of a typical subdivision has shrunk over the last few decades from about 120 homes to only about 75 today.

Inland Empire: There are just 207 active projects in the Inland Empire compared to 808 at the mid-2000s peak, and an average of 374 from 1988 to 2021. Project counts have also declined from a recent peak of 246 in 2019.

Los Angeles: The 76 active projects in the county are less than half of the average since 1988 (161). Outside of Santa Clarita/Valencia, supply consists primarily of small infill projects. Boasting a population of about 10 million, we consider Los Angeles to be the most undersupplied major new home market in the country.

Orange County: Project counts are down sharply in Orange County’s largest MPCs, including no projects now selling in Rancho Mission Viejo, just 6 at Great Park, and 11 on the Irvine Ranch. There are currently just 65 active projects in the county, less than half of the average since 1988 (138) and the mid-2000s peak (141).

San Diego: There are currently just 56 active projects – the second-lowest quarterly count on record. The current count is down 25% from 2020 (75), and 67% compared to the average since 1988 (170).

Limited new home supply is driving strong new home sales despite affordability concerns.

Given the lack of available land and significant entitlement hurdles, new home supply is expected to become even tighter in the coming years.