San Pedro is transforming fast — waterfront developments, rising investor interest, and improving cap rates are making it one of the most talked-about markets in Southern California. In this video, Juan Huizar and Jack Patel of Sage Real Estate break down everything you need to know about San Pedro real estate in 2025.
A Neighborhood on the Rise
Juan Huizar kicks off the discussion with a simple question: What’s going on in San Pedro?
Jack Patel, a longtime investor in the area and now part of the Sage Real Estate team, answers without hesitation. “San Pedro is going through a complete transformation,” he says. “You have Long Beach behind you, Rancho Palos Verdes above, and the city of LA surrounding it. And right now, San Pedro is finally getting the attention it deserves.”
Jack notes that many investors used to see Long Beach as the most affordable beachfront city. But he believes San Pedro may now hold that title. “There’s more bang for your buck here,” he adds.
Cap Rates and Affordability
For real estate investors, cap rates are key. And in this regard, San Pedro shines. Going back ten years, cap rates here have hovered around 5.5% to 6%, a stark contrast to areas like West LA, where rates sit in the low 2% to 3% range, and even Long Beach, which averages 4.5% to 5%.
After a period of compression during the pandemic — when interest rates were low and prices peaked — San Pedro’s cap rates have returned to historical norms. That means properties are more affordable again, and investors can expect stronger returns than in many nearby markets.
Price Per Door: Better Deals Than Long Beach
In the multi-family space, one important metric is the “price per door” — the average cost per unit in a building. Jack explains that in San Pedro’s 5+ unit market, price per door is currently around $222,000 to $255,000. Compare that to the pandemic peak of around $289,000 per door, and it’s clear there’s been a price adjustment.
That decrease spells opportunity. “You’re getting more value now than you would have in 2021 or 2022,” Jack explains. “And you’re still getting in at a time when the market fundamentals are solid.”
Inventory: Tight, But Active
One of the more surprising stats: Inventory is tight, but demand remains strong. “Everything that’s come up and is priced right is selling — and usually in under 40 days,” says Jack. That pace is faster than many other parts of Los Angeles County, and even beats out Long Beach in some cases.
This trend creates opportunity for sellers too. “If you’re a seller and you feel like you missed the peak, you’re actually still in a great position,” Juan explains. “Cap rates are strong, and properties are moving.”
Rent Control: What You Need to Know
A big question investors often have is about rent control. San Pedro falls under the City of Los Angeles’ Rent Stabilization Ordinance (RSO) if the building was built before 1978. That means owners must follow strict annual rent increase limits — 4% this year, and in some years, rent freezes.
But not all buildings are affected. Anything built after 1978 follows California’s statewide rent control law, AB 1482. That allows for annual increases of 5% plus the regional CPI, which is currently around 8.9%. The takeaway? “Not all of San Pedro is overly restrictive,” Jack says. “There are newer buildings where you have more flexibility.”
Long-Term Play with Big Payoff
Both Juan and Jack agree: San Pedro is a smart move for long-term investors. “This isn’t about flipping,” Juan says. “This is about holding and watching the city grow around your property.”
And the growth is very real. San Pedro is currently undergoing a $500 million waterfront redevelopment — complete with new shops, restaurants, an amphitheater, and even a Ferris wheel. Think Santa Monica Pier meets working port city. Nearly 5,000 residential units have been proposed in the area from 2020 to 2025, and over 3,500 are already underway or completed.
Timing the Market: When Will It All Come Together?
Understandably, some potential buyers are wondering, When will all of this be finished?
“The vision has always been there,” Jack admits. “But now we’re finally seeing real progress.” He estimates that much of the development, including the revamped waterfront, should be completed by 2026. “We’re not talking about someday — we’re talking about a couple of years from now.”
That means buyers who get in today could benefit not just from current affordability, but from major appreciation in the near future.
Final Thoughts
If you’re a seller in San Pedro, now might be a good time to get a property valuation. Prices have come down from the pandemic peak but are still historically strong. And if you’re a buyer or investor, the window is still open to secure great cap rates in a market that’s poised for growth.
Juan Huizar puts it simply: “There’s a lot of noise out there — interest rates, stock market volatility, global uncertainty. But people still trust real estate. And San Pedro might be one of the smartest bets in Southern California right now.”
Interested in Buying or Selling in San Pedro?
Reach out to the Sage Real Estate team for a personalized strategy.
