Los Angeles County homes sold for 66.8% more than those in surrounding suburbs in June, the largest urban-suburban price gap among 21 major U.S. metros.
The finding, first reported by the Los Angeles Times on Oct. 22, draws on an analysis of Redfin data. The analysis compared LA County median sale prices with those in Riverside, San Bernardino and Ventura counties. Orange County, where prices are higher than LA County's, was counted as its own urban area.
On a per-square-foot basis, the gap is even wider. LA County buyers pay an 84.7% premium over those purchasing in the surrounding counties, the data showed.
New York City came in second at 64.7%. Phoenix ranked third at about 27%. Seattle (12%) and Chicago (11.5%) trailed far behind. In Denver, San Antonio and Detroit, suburban homes were actually worth more than those in the city center.
The gap has bounced around in recent years. Before the pandemic, LA's price premium over its suburbs ran between 67% and 72%, the Redfin data show. Remote work drove buyers outward from 2021 to 2023, shrinking the premium to as low as 53%. It has since climbed back to pre-pandemic levels as return-to-office policies took hold.
Daryl Fairweather, Redfin's chief economist, said post-pandemic return-to-office policies shifted prices up in city centers nationwide. She pointed to fuel costs as another factor.
"Soaring gas prices make living in car-dependent suburbs more expensive than before," Fairweather said, according to the Times.
Commute times also play a role. Hans Johnson, a demographer at the Public Policy Institute of California, said the difficulty of getting from exurbs to LA's job centers helps explain the county's premium. About 96,000 people work in Burbank and 54,000 work in El Segundo, according to 2024 census data cited in the analysis.
Johnson noted that LA's suburbs and exurbs remain expensive by national standards, even as they offer more space. Much of the migration from coastal to inland areas in California is driven by buyers seeking larger, more affordable homes, he said.
LA County holds advantages that keep its prices elevated: proximity to high-paying job centers, beaches, mountains and major shopping destinations, the Times reported.
The median home in Orange County sold this year for $1.25 million, or $692 per square foot, more than double the suburban and exurban median price. In communities like Irvine and Costa Mesa, average prices approach $1.5 million.
LA County home prices rose 1.3% year over year to $952,830, while sales volume dropped 5.2%, according to The Korea Daily, citing recent market data.
The premium's full recovery to pre-pandemic levels suggests the price relationship between LA and its suburbs may be durable. Johnson put it plainly: "Urban California has high incomes and tremendous inequality."
