Southern California’s Top Homebuilding Hotspot Identified

Southern California is currently experiencing a significant surge in residential construction, as evidenced by a notable increase in building permits nearing a 19-year high. Comprehensive analysis of building permits across Los Angeles, Orange, Riverside, San Bernardino, and San Diego counties indicates that developers approved plans for nearly 59,900 housing units in the 12 months leading up to March. This marks the highest level of residential authorization since August 2007.

However, the growth in building permits is not uniform across the region or the types of housing being constructed. In the metropolitan area encompassing Los Angeles and Orange counties, there has been a marked increase in residential developments. Over the past year, these regions have seen an approval for 33,800 units, representing the most accelerated pace of permitting since July 2018. This figure exceeds the four-year average by 15%, indicating a robust demand for housing during a period observed as a building boom in various parts of the country.

Particularly noteworthy is the climb in multifamily unit permits, which have become the preferred choice among developers. Los Angeles and Orange counties recorded 21,300 multifamily permits filed within the last year, making up approximately 63% of all residential construction in these counties. This represents a significant 17% increase when compared to the average from 2021 to 2025, showcasing a renewed interest in multi-unit housing. Concurrently, there has been an 11% rise in permits for single-family homes within the same timeframe.

In stark contrast, the Inland Empire is witnessing a downturn in residential construction with 14,200 permits issued over the past year, amounting to a 12% decrease from the previous four years and marking the lowest level since February 2021. Despite this decline, the issuance of 5,700 multifamily permits indicates a shift in construction trends, as these units now constitute 40% of all residential developments in the region.

San Diego County, on the other hand, has shown a promising upward trend, with 11,900 permits issued in the last year, a 16% increase from January 2021 through December 2025, representing the highest level since September 2025. Of these, 8,500 multifamily permits accounted for 71% of the total housing construction, signaling a potential shift towards more dense living arrangements in urban areas.

Overall, while Southern California is experiencing a homebuilding renaissance, the variations across different regions and types of housing illustrate the complexities and challenges that define the current real estate market. The focus on multifamily housing, particularly in metropolitan areas, aligns with changing demographic preferences and housing demands in Southern California.

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