Is it Cheaper to Buy or Build a House in Los Angeles?

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Los Angeles is a seller’s market as of spring 2024. This means that LA homes are seeing multiple offers since inventory remains low. This is great news if you are planning to sell your property, but it could spell trouble if you want to buy something. In order to purchase a home, you might find yourself having to make a higher offer, navigating an appraisal gap and even forgoing important steps of a home sale, such as the inspection or repair requests. 

Due to these roadblocks, some people are turning towards new construction. However, building a new home in LA comes with a host of other challenges, such as increased costs and longer timelines. Today, we are going to be looking at the expenses associated with building a home versus buying a home in Los Angeles.  

Costs of Buying a House in Los Angeles

The median home price in Los Angeles has been on the rise, with recent figures placing it well above $800,000. This figure, however, can vary widely depending on the neighborhood. For instance, areas like Beverly Hills or Santa Monica command premium prices, while regions such as San Pedro or the San Fernando Valley can be more affordable. 

Buying an existing home often means compromising on certain preferences like layout, design and efficiency of the building materials and systems. However, the advantages include convenience, speed of acquisition and the charm of established neighborhoods.


  • Immediate availability.
  • Established neighborhoods with existing infrastructure.
  • Potentially lower upfront costs compared to building.


  • Older homes may require significant repairs and renovations.
  • Less customization.
  • Potentially higher long-term maintenance costs.

Costs of Building a House in Los Angeles

Building a home in Los Angeles offers the allure of customization but comes with its own set of challenges and expenses. The cost of construction in Los Angeles is among the highest in the nation, with expenses ranging from $400 to $500 per square foot depending on the materials, design and location. Key factors that influence these costs include:

  • Land costs. Empty lots in desirable neighborhoods can be scarce and expensive.
  • Permitting and fees. Los Angeles has complex building codes and regulations that can add to the time and cost.
  • Construction costs. Labor and materials in Los Angeles are costly, and custom features or high-end finishes can drive the price even higher.
  • Time. Building a house can take a year or more, during which housing might need to be arranged, adding to costs.


  • Customization of design and materials.
  • New homes are often more energy-efficient.
  • Lower maintenance and repair costs initially.


  • Higher upfront costs.
  • Lengthy building process.
  • Risk of construction delays and budget overruns.

Financial and Practical Considerations

The decision to buy or build ultimately depends on individual circumstances including budget, timeline and specific housing needs. Financially, buying an existing home might seem cheaper initially due to the high costs of construction and land in Los Angeles. However, building a new home could be considered an investment towards living in a house that precisely meets your personal preferences and future needs, possibly saving on future renovations and energy costs.

It’s essential to conduct thorough research and consider future housing market trends, personal circumstances and long-term financial impact. Consulting with real estate experts, architects and builders can provide a clearer understanding of what to expect and help in making an informed decision.

Luxury Home Builder in Los Angeles 

Whether it’s cheaper to buy or build a house in Los Angeles depends on numerous factors, including market conditions, personal preferences and long-term financial considerations. If you’re on the fence, be sure to weigh the immediate costs against the potential long-term benefits of owning a home that perfectly suits your lifestyle and needs. To discuss your new construction project, schedule a consultation with Kavin Construction today.