8/01/2007

Plusses and Minuses of Long Beach Condo Conversions

Bluff Park condo conversion in Long BeachNational homeownership by the end of the Clinton Administration supposedly rose to about 65%, the highest ever recorded. But, according to the City of Long Beach within the last few years, during that same time period, that was about how many non-owners were living in Long Beach. In other words, we were the opposite of the national picture. According to the Long Beach Business Journal, July 31, 2007 edition, the local situation may be close to reversing itself. A total of 152 conversion projects have been approved, reducing Long Beach's supply of rental homes by 2,133 since 2000.

No trend is perfect: The opportunity for homeownership has decreased homes available for renters. With long term population projections in the state predicting that the demand for housing will continue far into the future, there will continue to be a demand for housing for both owners and renters, and right now there's a demand for rental housing, and there may be some future restrictions on conversions to allow for a balance. The newly converted units are often smaller and priced lower--800-900 sq ft for a 2 bedroom--than the original condos. Some lenders need specific information on final conversion date and the current owner occupancy level, if any, to underwrite financing. The smaller 2-story buildings may not have elevators, however, remodeled new interiors with new appliances, for some buyers, may be a compensation for these other factors. Buyers should know that in dealing with a smaller building, they will also be a dealing with a smaller risk pool in their Association funding. The unit at 2138 E 1st St. is an upper floor 2 bd/2ba, 775 sq. ft, $238/month HOA dues, ocean view, in a historic district, and has been listed and on the market for 440 days, per today's MLS activity, in a building of 10 units where all others have now sold, list price $417,500. There are others on the market at lower prices than this one.
For a list of condo units in this area, please let me know, they're easy to e-mail.
Do tenants need some protections and acceptable and affordable housing stock, yes. Do buyers need lower-priced units and opportunity to buy in a selection of areas, yes. The story is not as completely simple as this, there are multiple effects and ramifications on each side pertaining to job impact, higher developer fees, higher rents, and units sitting on the market, but the City of Long Beach wanted more owner-occupied housing, and that is what is happening.

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