Four Ways the Chargers' Move to Los Angeles Will Impact Real Estate
After a years-long struggle between ownership and taxpayers, the NFL's San Diego Chargers announced that they will become the Los Angeles Chargers next season, leaving the city they’ve called home for 56 years. While they wait for the completion of their new state-of-the-art stadium home in Inglewood (which they'll share with the Los Angeles Rams) in 2019, the team will play home games at the minimalistic (by NFL standards) StubHub Center in Carson, CA.
The move is sure to have a ripple effect in multiple ways, from finances to fandom. One area it will have a profound effect is in real estate, specifically how the team’s departure from San Diego and arrival in Carson will affect local and regional markets. The sudden removal of a multi-million dollar company from one city and its arrival in a new one tends to do that.
Here’s four ways in particular that you can expect the Los Angeles Chargers to affect the real estate market in neighborhoods across Southern California.
Financial Hit Will Impact San Diego Real Estate
Truth be told, studies showed that even if the Chargers stayed in town and built a new stadium, that wouldn’t have had a profound effect on local real estate value. However, the sudden removal of the franchise from the region is sure to have a big financial impact, part of which is sure to be felt in the real estate sector.
It is said that the total impact on the region will be $126 million but that doesn’t account for local expenditures by players (which includes million-dollar homes) and visiting fans. Also not included in that number is the impact of 1,600 lost jobs and a $67 million loss of labor income, which will delay any home buying plans for a sizable chunk of San Diegans.
The biggest hit will come to the area surrounding Qualcomm Stadium, which just lost eight-figures annual revenue. That impacts not only the stadium but all of the retail and residential development that could have gone up or prospered around it.
San Diego’s Luxury Real Estate Market Will Adjust
The people perhaps hit hardest are the real estate brokers who have worked closely with Chargers players and front office officials on home buying. That’s a pricey client base that just vanished. Cities such as Poway and Rancho Santa Fe are about to have a few more available homes as well.
Carson Real Estate Prices Will Get a Boost
The median price of homes in Carson is around $460,000. Now, Chargers players are unlikely to want to set up shop next door to the stadium, but the fact that people will be able to live close to an NFL team for the next few years (and take in the economic impact of that) is sure to give that number a boost. Expect to hear about an uptick in development close to StubHub Center as it becomes one of the region’s top sports destinations (home also to the LA Galaxy), at least for the near future.
Los Angeles Luxury Homes Have a New Client Base (Eventually)
The prevailing opinion is that the arrival of a pro sports franchise has more of a psychic effect than a tangible one in terms of boosting a city’s economy. However, it would be silly to think that the sudden arrival of 75-80 millionaires won’t have some kind of impact on at least one or two aspects of life. Luxury real estate is going to be the main benefactor.
The Chargers recently completed a tentative deal for an office complex/training facility in Costa Mesa and players often prefer to live closer to that than the stadium. Consider it likely that those ready to buy will look nearby.
Kofi Nartey, director of sports and entertainment at Compass, told The Real Deal that if you use the recently-arrived Rams as an example, many of those players rented to start with but once the training facility was finalized (in Thousand Oaks), home sales soon followed.
As for where else players might end up buying, Chargers running back Ronnie Hillman has already given us an example. He recently leased a home in the Hollywood Hills. According to Lee Mintz of Partners Trust, players are also looking to Downtown, Manhattan Beach and West Hollywood.