In the Long Beach single-family real estate market, sellers still hold the advantage. Realtors who spoke to the Business Journal said the market is showing signs of evening out, but demand for homes continues to exceed supply.
Whereas a balanced real estate market, in which buyers have more room to negotiate, holds at least six months of stock, the most recent data for single-family detached homes in Long Beach places inventory at about 2.8 months, according to Phil Jones, president and CEO of Coldwell Banker Coastal Alliance. Comparatively, during April 2018, inventory was at 2.1 months, he noted.
When compared to the start of 2018, the increase in supply is even more significant; at the time, the inventory of homes for sale in Long Beach was just 1.7 months, according to Beatrix Whipple, CEO of Long Beach real estate agency The Whipple Group. During that time, sellers could list their homes at more “aspirational” prices and probably find a buyer, she added.
Pending sales for single-family homes have decreased 10.5% compared to April of last year, with closed sales down 8.6%, Jones said. “Slower rate of sale and a few more listings coming on the market leads to the inventory growing,” he explained. The slowdown is a little surprising, he added, because interest rates have not risen.
Maruja Tosses, a real estate agent at Keller Williams Coastal Properties, confirmed the slower rate of sales. In her experience, the homes that she shows are averaging about 30 to 45 days on market – a major dip from last year. “About 12 months ago they would go over the weekend,” she said.
The current market is softer than it was a year ago, but Whipple said buyers should not be mistaken and think they have more leverage to underbid on properties. The sale-to-list ratio of single-family homes, which compares the price at which homes are listed to what they ultimately sell for, decreased only 0.6% between April 2018 and April 2019, she explained. The same was true for the condo market sale-to-list ratio, which saw an almost identical drop over the last 12 months.
The median price for single-family homes in April 2019 was $633,000, Jones said – a 1.3% increase compared to April 2018. The condo market has been much more inviting to first-time buyers, he said, where the median price is currently about $380,000. “Many young families, young individuals, begin in condos,” he said.
Tosses said she’s beginning to see a generational shift in home buyers. “The Millennials, they’re starting to come in. . . . They are not concerned about getting married so much, but they want their retirement set first. So, knowing that purchasing a home would get them to retirement quicker, they seem to be getting that message and they’re jumping in.”
West and North Long Beach are generally more affordable areas to look for a house or condo, Jones said. The 90803 zip code, which encompasses Belmont Shore and Naples Island, has some of the most expensive homes. Yet all real estate agents that spoke to the Business Journal noted that Long Beach is probably the least expensive beach city in Southern California.
“Especially if the house is in Belmont Shore where they’re going for over $1 million . . . those same houses in Orange County would have gone for $3-4 million,” Tosses said. “I often tell people, if you want better-priced beach living, this is probably your spot.”