Why Long Beach, South Bay, and LA Condos Aren't Selling Like Houses 📉

In the competitive Southern California real estate market, single-family homes have consistently outperformed condominiums in sales. While condos offer a more affordable entry point to homeownership, a combination of market trends, buyer preferences, and economic factors has made them a tougher sell in Long Beach, the South Bay, and Los Angeles.

The Appeal of Single-Family Homes

After years of living through a pandemic, many buyers prioritize personal space and privacy. Single-family homes offer a host of advantages that condos can't match, directly influencing their higher demand:

• More Space & Privacy: Remote and hybrid work schedules have driven a desire for larger living spaces, including dedicated home offices, gyms, and private yards. Single-family homes provide the square footage and separation from neighbors that many buyers now want.

• No HOA Fees or Restrictions: Condos come with a major downside: Homeowners Association (HOA) fees. These monthly dues can be a significant financial burden on top of a mortgage and can increase without warning. Furthermore, HOAs impose strict rules on everything from renovations to pet ownership, limiting the homeowner's freedom. For many buyers, the absence of HOA fees and regulations is a major draw to single-family homes.

• Investment Potential: Historically, single-family homes have appreciated faster than condos, making them a more attractive long-term investment. They offer more control over property improvements and don't carry the risk of a poorly managed HOA that could jeopardize the value of the entire building.

Challenges in the Condo Market

The factors that make single-family homes so desirable are the same ones hurting condo sales. Condos in Long Beach, the South Bay, and Los Angeles face several specific headwinds:

• High Inventory and Lower Demand: In Long Beach, for example, the number of condo listings is higher than single-family homes, and they stay on the market longer. In a balanced market, this increased supply without a corresponding increase in demand gives buyers more leverage and makes sellers wait for an offer. This is evident in Long Beach data, where single-family homes sell in an average of 33 days, while condos take an average of 51 days to sell.

• Rising Costs of Ownership: While the initial purchase price of a condo is typically lower, the rising cost of HOA fees, insurance, and utilities can make the total monthly payment less appealing. In some cases, the combined cost of a condo mortgage and HOA fees can rival or even exceed the cost of a mortgage for a single-family home.

• Shifting Investor Behavior: Condos have long been a popular choice for real estate investors. However, with rising interest rates and market volatility, many investors are hesitating, leading to a decrease in the number of potential buyers for these units.

Conclusion

While the Southern California housing market as a whole is experiencing some price stabilization and longer selling times, the divide between single-family homes and condos is stark. Single-family homes continue to be the preferred choice for buyers prioritizing space, privacy, and long-term investment potential. The challenges posed by HOA fees, a post-pandemic shift in buyer preferences, and market saturation have made condos a slower-moving segment of the real estate market.

This presents a unique opportunity for savvy condo buyers who are willing to navigate these factors. For sellers, understanding these trends and pricing their property competitively is crucial to a successful sale.