South LA County & Long Beach Real Estate Market Update: What California’s Mixed 2025 Economy Means for Buyers, Sellers, and Investors in 2026

As 2025 came to a close, California’s economy sent mixed signals, and nowhere is that more evident than in South LA County and Long Beach real estate. Home sales climbed to their highest level since fall 2022, prices showed signs of stabilization, and consumer behavior shifted amid economic uncertainty. At the same time, rising unemployment, soft retail activity, and distorted inflation data created a more cautious outlook heading into 2026.

Here’s what these trends mean for local homeowners, buyers, and investors as we enter a new year.

California Home Sales Reach Highest Level Since Fall 2022 — But Momentum Is Slowing

California home sales continued their rebound in November, reaching their highest level since September 2022. Existing single-family home sales rose both month-over-month and year-over-year, posting a 2.6% annual increase compared to November 2024.

While that growth is encouraging, context matters. Statewide sales have now remained below the 300,000-unit benchmark for 38 consecutive months, signaling that the recovery remains fragile. Even more telling, pending home sales declined 4.6% year-over-year and dropped a sharp 18% from October, reflecting seasonal slowdowns, mortgage rate volatility, and growing economic concerns.

For South LA County and Long Beach, this translates to:

• More selective buyers

• Longer decision cycles

• Increased importance of pricing and marketing strategy

Sales activity is expected to close 2025 with modest gains, but early 2026 is shaping up to be slow and strategic rather than fast and frenzied.

Home Prices Stabilize Across California — Southern California Sees Modest Gains

California’s median home price remained essentially flat year-over-year in November, landing at $852,680, while declining 3.9% month-over-month as competition cooled — a typical seasonal pattern.

Southern California posted a 1.2% annual price increase, outperforming several other regions. This stability is particularly relevant for Long Beach and South LA County, where pricing remains supported by:

• Limited inventory

• Long-term housing demand

• Investor interest in value-add and rental properties

That said, not all regions saw gains. The San Francisco Bay Area and Central Valley experienced year-over-year price declines, reinforcing that local market conditions matter more than statewide headlines.

Retail Sales Cool as Consumers Grow More Cautious

Retail and restaurant sales softened in October, signaling a more cautious consumer. While overall retail sales were flat month-over-month, the slowdown was driven by:

• A 1.6% drop in auto sales

• A 0.4% decline in restaurant and bar spending

However, not all sectors struggled. Online retailers grew 1.8%, and department stores rose 4.9%, suggesting consumers are still spending — just more selectively.

For real estate, softer consumer spending often correlates with:

• Buyers taking more time before committing

• Increased negotiation leverage

• Greater sensitivity to monthly payment affordability

While the holiday season should provide a modest boost, spending patterns point toward a measured, cautious start to 2026.

Labor Market Weakens Despite November Job Gains

The job market remains a key factor shaping housing demand. Employers added 64,000 jobs in November, outperforming expectations, but this followed a sharp 105,000-job loss in October tied largely to federal government layoffs.

Combined, October and November resulted in a net job loss of 41,000 positions, and the unemployment rate climbed to 4.6% — the highest level since 2021. Broader underemployment also increased to 8.7%.

Job growth remained concentrated in:

• Health care

• Construction

• Social assistance

Meanwhile, transportation, hospitality, and federal employment declined — sectors that play a meaningful role in South LA County’s local economy.

Inflation Data Comes in Soft — But With Caveats

October’s inflation report surprised on the downside, with CPI rising just 0.2% month-over-month and 2.7% year-over-year, the lowest annual increase since June. However, the data was distorted by the government shutdown, which disrupted the Bureau of Labor Statistics’ data collection process.

Economists caution that December’s inflation report could rebound, meaning interest rate volatility is far from over. For buyers and sellers alike, this reinforces the importance of timing, rate strategy, and long-term planning.

What This Means for South LA County & Long Beach Real Estate in 2026

Taken together, these trends point to a market defined by:

• Stability, not acceleration

• Opportunity for prepared buyers and sellers

• Increased importance of hyper-local data

Whether you’re considering selling, buying, investing, or simply repositioning your property for the next phase of the market, city-specific insight matters more than ever.

Thinking About Making a Move in 2026? Let’s Talk

Every neighborhood in Long Beach and South LA County is responding differently to these economic shifts. If you want a breakdown of what’s happening in your specific city, or guidance on whether now is the right time to buy, sell, or hold, reach out directly. I’m happy to walk you through your options with real numbers, not headlines.