Home Real Estate Hotter than Commercial Now in Long Beach

In case you’re wondering how Long Beach’s real estate market is doing, it depends on whether you’re talking about homes or commercial properties. For those buying properties, the better deal is on the commercial side.

Of course, on the home real estate market, there’s always the question of whether you should buy now to beat ever-increasing prices.

According to the Long Beach Real Estate Corner newsletter, which is published by the Shannon Jones Team and Keller Williams Coastal Properties, we’re in a supply and demand shortage for home sales in Long Beach.

Some of the Reasons for Scarcity In Homes

Construction projects have been backed up due to the pandemic. While more people wanted to buy houses or remodel them and work from home during that time, the construction labor shortage and having supplies delayed at the ports due to COVID-19, has kept the backlog in place all this time.

Millennials are moving into Long Beach and many of them want to buy a house. They’re going through their own challenges in finding a home to buy that’s not too expensive – which is, of course, more of a factor now that home sale prices have gone up. Student loan debt is another factor in Millennials being able to get a loan for a home purchase.

Buying houses has been a hot commodity for institutional investors. They’ve been buying up homes in all the segments, including the lower-priced houses. That’s tightened the supply even more.

Sellers are happy with this trend, with homeowners getting strong returns on their home investment, and for real estate agents, strong returns on their inventory of properties available for sale. Buyers are having to work harder on getting a home they can afford, which usually means expanding the area they’re looking for and buying a smaller house; or getting into a condominium.

Looking at the Realtor.com website for the Long Beach market, there are plenty of these pricey properties to check out. A three bedroom, two bath, 1,476 square foot house on Radnor in the 90815 zip code is listed at $1,025,000. A three bedroom, 2 bath, 1,369 square foot house on Chestnut Ave., near Spring St., is going for $819,989.

The city is seeing a lot of housing and commercial development projects in the works, but that will take a while and much of that are condo complexes. You can view the city’s directory of approved projects at its Development Projects Map, which had 117 properties on this map as of November 9. It’s a good sign that real estate developers and financial backers have much confidence that Long Beach will continue to grow economically and on both real estate fronts.

What the Commercial Real Estate Market Looks Like

Lee & Associates reports that on the commercial property side, the market is tight for sellers. The asking rates are still too high for the level of demand that’s out there now.

Looking at the Q3 2023 Southbay Industrial Overview, which includes Long Beach, there’s been a vacant-available rate increase of 3.8%, which is 270 basis points above the rate from one year ago. Lee & Associates attributes that rate increase to the excess inventory levels stabilizing and lower import volumes from overseas.

Commercial property owners had previously been acquiring more space to keep up with the pandemic-induced demand. Industrial landowners are having to get more creative about pricing and marketing excess space for sublease. A sign of that recent trend is that vacant-available space now totals over 7 million square feet (MSF) or 0.7%. A year ago in Q3 2022, vacant-available space totaled 2 MSF or 0.1%.

The Southbay Industrial Overview reports that there were only 54 deals transacted this quarter, and 11 of them were sublease deals. One reason that Lee & Associates says that we’re seeing this decline appears to be influenced by the high asking rates at approximately $2.05 NNN PSF for Class A buildings, despite a quarter-over-quarter decrease of 9.3%.

One problem was recently solved with the ILWU labor contract dispute being resolved and the workforce back in good shape at the ports. Economists expect a lot of opportunities on the horizon at the nation’s busiest container shipping ports in Long Beach and Los Angeles.

A good example of what available commercial land in the shipping and container region looks like is seen in the photo from Lee & Associates. This a trucking and container yard for sale, located at 1550-1570 Cota Ave., Long Beach, CA, 90813.

It’s about a 19,630 square foot industrial warehouse on about 57,500 square feet of land. It’s 34% building to land coverage ratio, and for power it has 600 amps, 208 volts, and three-phase power available.

It’s available for rent at a building rate of $2.49 / SF NNN, which comes out to $48,879 per month. One of the selling points for getting a customer to pay that much is close proximity to the Long Beach and Los Angeles ports, and to the I-710 freeway.

What You Need to Know About Buying a Historic Home

Another opportunity you can read about in the Long Beach Real Estate Corner is four things to consider before buying a historic home:

You’ve got to come up with preservation and maintenance costs, which can be expensive.

Homes in city-designated historic districts or that have reached historic landmark status must follow guidelines that can limit exterior modifications.

You might want to bring in an experienced expert on historic homes and buildings, as having the renovation done and inspected by the city will get complicated.

Do your homework on who owned it before and what’s distinct about the property. You may qualify for tax incentives or preservation-related grants.

Jon LeSage is a resident of Long Beach and a veteran business media reporter and editor. You can reach him at jtlesage1@yahoo.com.