Soaring construction costs around the city of Los Angeles create another challenge to rebuilding efforts from wildfire damage. My trusty spreadsheet looked at cost indexes from Verisk tracking 34 regions statewide, including 12 in Southern California. In Los Angeles, costs rose 5.9% for the 12 mont hs ended in the fourth quarter, the steepest increase in the state. Remember, these hikes came before the exploding construction demands created by January’s firestorm, which destroyed or damaged 12,000-plus structures around Altadena and Pacific Palisades. And nobody knows what threatened trade wars mean for building supply prices. L.A.’s 2024 cost surge of 5.9% was part of a 44% jump over the last five years, the fourth-largest jump in California. Perhaps the only good news is that L.A.’s construction inflation has slowed dramatically from the 12.4%-a-year peak pace in the first quarter of 2022. Not just L.A. Since the pandemic, construction has gotten very expensive everywhere. Why? The building industry had to race to catch up from coronavirus-linked interruptions just as supply chain challenges ballooned the cost of goods needed to build. So, statewide construction costs rose 3.2% in 2024 and have increased 39% since 2019. At least building inflation in California is far off the top — a 12.5% annual rate in 2022’s first quarter. And across Southern California, the median inflation rate was 2.9% last year and 39% since 2019. Cost hikes in the 12 local markets peaked at 13% in the first quarter of 2022. The culprits are not enough labor and hard-to-get materials. And those staffing headaches have been driving up expenses lately. A federal construction-wage index shows California labor costs are up 4% annually and 21% since 2019. As measured by a national price index, construction goods got 1% cheaper in the past year but remain 40% costlier over five years. Regionally speaking Think about construction inflation in other Southern California markets, ranked by one-year increases … Palm Springs: Up 3.7% in the past year (No. 5 among the state’s 34 markets) and up 39% over five years (No. 20). Peak was 13.2% annual rate in the first quarter of 2022. South Bay: 3.7% last year (No. 6), 35% five years (No. 32). Peak? 8.9%, first quarter 2022. San Fernando: 3.3% last year (No. 11), 42% five years (No. 10). Peak? 13%, first quarter 2022. San Diego: 3% last year (No. 17), 44% five years (No. 7). Peak? 18.9%, first quarter 2022. Simi Valley: 3% last year (No. 18), 40% five years (No. 17). Peak? 12.8%, first quarter 2022. Santa Barbara: 2.9% last year (No. 20), 36% five years (No. 29). Peak? 11.6%, fourth quarter 2021. Orange: 2.9% last year (No. 21), 44% five years (No. 5). Peak? 15%, first quarter 2022. San Bernardino: 2.7% last year (No. 26), 38% five years (No. 22). Peak? 13.3%, first quarter 2022. Victorville: 2.6% last year (No. 29), 40% five years (No. 15). Peak? 13.3%, first quarter 2022. Lancaster: 2.6% last year (No. 30), 37% five years (No. 28). Peak? 11.8%, fourth quarter 2021. Ventura: 2.5% last year (No. 31), 42% five years (No. 9). Peak? 14.9%, first quarter 2022. Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com Related Articles Where in Southern California did it get easier to buy a home? LA wildfire rebuilding faces construction worker shortage Southern California inflation has cooled, but is it enough? Los Angeles construction costs jump 5.9%, another fire rebuilding hurdle ...read more read less