June data showed homes in Los Angeles County selling for 66.8% more than nearby suburban markets — the largest core-versus-suburb gap among the 21 biggest metro areas in the United States.

Here's what to know

Despite resident surveys showing broad unhappiness with quality of life and continued population losses, Los Angeles County real estate still commands some of the highest prices in the country.

Using Redfin numbers, a Los Angeles Times analysis found Los Angeles leading the country with New York close behind. Phoenix had a 27% premium, and Dallas-Fort Worth was at 11%. By price per square foot, the Los Angeles divide was even steeper, with buyers in the county's core paying an 84.7% premium over surrounding areas.

Daryl Fairweather, Redfin's chief economist, said shifting work patterns following the coronavirus pandemic and the rising cost of getting around are the two forces helping city centers hold. After the pandemic, she said, return-to-office policies pushed prices higher in urban cores, while "soaring gas prices make living in car-dependent suburbs more expensive than before."

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More background

Los Angeles also stands apart because employment is spread across multiple hubs, even though those job centers can be difficult to reach from farther-out communities. 

Hans Johnson, a demographer at the Public Policy Institute of California, said Los Angeles and New York likely have some of the nation's largest urban premiums because of "how difficult it would be to get from the exurb to the core or even to its surrounding suburbs."

2024 census data shows about 96,000 jobs in Burbank and about 54,000 in El Segundo. For many households, that means a lower-priced home farther inland comes with a brutal commute, higher fuel costs, and less day-to-day flexibility.

Nearby areas are hardly cheap themselves. Orange County — counted separately in the analysis because of its own major job centers — had a median home sale price of $1.25 million — $692 per square foot. In Irvine and Costa Mesa, average home prices were nearly $1.5 million.

What can be done?

The decision remains a double-edged sword: go farther out to get more space, or pay a premium to remain closer to jobs and amenities. Johnson said home prices usually decline as households move outward, and many relocations from coastal counties to inland communities are driven by the search for larger homes at lower prices.

The data may also show a return to Los Angeles' older pricing pattern. Before the pandemic, the county's core typically carried a 67% to 72% premium over suburbs and exurbs. That fell as low as 53% from 2021 to 2023 during the California exodus, but has now risen back to pre-pandemic levels.

With Palmetto's help, the average Southern California resident can save 40% on their electric bills, which can add up to thousands of dollars per year. The company's $0-down offer could be especially valuable for homeowners already stretching to stay in one of the country's priciest housing markets.

That push and pull helps explain why grim headlines about downtown conditions have not erased demand in central Los Angeles. 

Johnson said, "Urban California has high incomes and tremendous inequality."

Where can I learn more?

California housing costs and the pressure in nearby markets help to explain why buyers keep recalculating what they can afford. 

• In Palo Alto, assessed property values rose 5.47% as homeowner appeals surged.

• In one state, climate and insurance risks are starting to reshape home values.

• Across the U.S., homeowners insurance rates keep climbing and squeeze already-stretched housing budgets.

• In California, insurance premiums keep rising, adding another heavy cost to homeownership.

• Major cities are turning office space into apartments to ease shortages and lower rents.

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