Nine out of the top 10 metro areas in the U.S. that saw a decline in starter homes sales from 1990 to 2020 are in California, according to a Redfin analysis shared exclusively with USA TODAY.
The Los Angeles-Long Beach-Anaheim area metro area topped the list with the biggest decline in starter homes, defined as new or existing single-family homes measuring 1,400 square feet or less.
There, 120,534 fewer entry-level homes were sold in 2020 compared with 1990. At the same time, the L.A. metro area population rose to 13.1 million in 2020 from 11.2 million in 1990.
Overall, at close to 40 million, nearly 11 million more people live in the Golden State now than in 1990.
“The issue in places like California is that new construction is very constricted because of zoning and other red tape around building new homes,” says Daryl Fairweather, chief economist for Redfin.
When it comes to existing homes, people who bought 20 years ago may not be able to trade up, even if their own homes appreciated in value, Fairweather says.
►Save better, spend better: Money advice and tips delivered right to your inbox. Sign up here.
In the Los Angeles area, for instance, the median price of a starter home rose to $556,000 in 2020 from $159,500 in 1990.
The construction of entry-level homes nationally fell from 418,000 units a year in the late 1970s to 65,000 in 2020, standing at five-decade low, according to Freddie Mac.
While in 2020 only 65,000 entry-level homes were completed, there were 2.38 million first-time homebuyers that purchased homes.
“Not all renters looking to purchase their first home were in the market for entry-level homes, however the large disparity illustrates the significant and rapidly widening gap between entry-level supply and demand,” wrote Sam Khater, the chief economist for Economic & Housing Research for Freddie Mac, in a recent report.
Metro areas with the biggest drop in starter home sales (1990 vs. 2020)
•Los Angeles-Long Beach-Anaheim, California: -120,534
•Riverside-San Bernardino-Ontario, California: -57,476
•Sacramento-Roseville-Folsom, California: -30,854
•San Francisco-Oakland-Berkeley, California: -16,267
•Urban Honolulu, Hawaii: -6,341
•Modesto, California: -6,013
•Vallejo, California: -5,749
•Santa Rosa-Petaluma, California: -5,409
•Stockton, California: -5,162
•San Diego-Chula Vista-Carlsbad, California: -4,880
Metro areas with the biggest jump in starter home sales (1990 vs. 2020)
•New York-Newark-Jersey City, New York-New Jersey-Pennsylvania: 93,244
•Detroit-Warren-Dearborn, Michigan: 78,794
•Washington-Arlington-Alexandria, D.C.-Virginia-Maryland-West Virginia: 62,933
•Phoenix-Mesa-Chandler, Arizona: 58,967
•St. Louis, Missouri-Illinois: 53,252
•Denver-Aurora-Lakewood, Colorado: 51,389
•Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin: 44,183
•Atlanta-Sandy Springs-Alpharetta, Georgia: 43,085
•Kansas City, Missouri-Kansas: 42,376
•Indianapolis-Carmel-Anderson, Indiana: 42,170
Swapna Venugopal Ramaswamy is the housing and economy reporter for USA TODAY. Follow her on Twitter @SwapnaVenugopal
This article originally appeared on USA TODAY: Housing: Top 10 metros for increase and decline in starter home sales