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
| City | Price per square foot discount |
|---|---|
| Tampa, FL | -$40.80 |
| Phoenix, AZ | -$30.90 |
| Sacramento, CA | -$26.20 |
| Raleigh, NC | -$25.90 |
| Riverside, CA | -$19.80 |
| Denver, CO | -$17.30 |
| Dallas, TX | -$9.90 |
| Portland, OR | -$7.60 |
| Nashville, TN | -$7.10 |
| Indianapolis, IN | -$5.10 |
| United States | -$3.50 |
| Orlando, FL | -$2.60 |
| Charlotte, NC | -$2.00 |
| San Antonio, TX | -$1.30 |
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
| City | Price per square foot increase |
|---|---|
| New York, New York | +$77.80 |
| Cleveland, OH | +$80.20 |
| Milwaukee, WI | +$87.60 |
| San Francisco, CA | +$137.10 |
| San Jose, CA | +$216.10 |
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.