Source: Daily Breeze
The South Bay economy is giving residents and business owners mixed messages, but how the region handles the series of major events coming up — such as the 2026 World Cup, 2027 Super Bowl, and 2028 Olympics and Paralympics — could forever change the future of the South Bay, experts said this week.
Cal State Dominguez Hills released its annual economic forecast report on Thursday, March 5, and held a panel discussion with economic, mega-event and real estate experts.
The report looks at economic statistics from 2025 and predicts the region’s future through an “economic forecast — the premier source for in-depth economic information and analysis of the South Bay region of Los Angeles County,” according to a CSUDH press release.
“It takes a focused look at emerging industries and game-changing technologies,” the release said, “and (the panel discussion) is attended by the region’s top business, education, civic and government leaders.”
The report highlights three major takeaways from 2025: The impact of international tariffs on the ports of Los Angeles and Long Beach, insufficient housing supply and the decline in tourism. It does note, however, that the South Bay is positioned to make a comeback with the influx of major events approaching — if taken advantage of.
“Housing supply remains far below what is needed, labor markets are softer than the national average and trade-related disruptions, especially around the ports of Los Angeles and Long Beach, have introduced volatility even as they underscore the region’s global role,” the report said. “With the World Cup, Super Bowl and Olympics approaching, the region faces a defining moment. The economy remains robust, but how effectively the South Bay navigates housing, workforce transitions, infrastructure demands and regional coordination over the next few years will determine whether this period becomes one of temporary strain or lasting, inclusive growth.”
Real estate
The South Bay cannot keep up with the demand for housing, which is causing an affordability crisis. Because of the lack of competition, housing prices are stabilizing. Both coastal and inland cities also saw a significant decline in home sales because of unaffordability. Only 16% of households in the L.A. metro area, in fact, can afford to purchase a median-price single-family home, according to the Housing Affordability Index.
It is not only residential real estate that is contributing to an economic decline, but also commercial properties. Because of the shifting work environment following the COVID-19 pandemic, where not everyone goes into an office anymore, much commercial real estate has been sold.
“Commercial real estate, especially office, continues to reprice and reposition after the pandemic shift. Availability and vacancy remain elevated; absorption is weak,” the report said. “And the question is no longer, ‘When do we go back to normal?’ It’s, ‘What is the new normal?’ More hybrid work, more scrutiny on location and more conversion/redevelopment discussions. This is locally relevant, with office softness affecting property values, local fiscal capacity and the use of key corridors.”
Local governments, the report said, may need to change policy regulations to not only entice, but also make it easier for developers to come to the South Bay.
Tariffs
The ports of Los Angeles and Long Beach saw a steep decline in exports and imports following the implementation of tariffs. And those effects have trickled down to warehousing, local infrastructure, retailers and, eventually, the consumers.
“Six months after the tariffs were introduced, roughly 20% of tariff costs had been passed through to consumers at the retail level, adding an estimated 0.7 percentage points to the all-items Consumer Price Index (CPI),” the report said. “Price increases were especially pronounced for lower-priced goods, placing a disproportionate burden on lower-income households.”
Tourism
The South Bay, once an international hub, has yet to recover from the pandemic when it comes to tourism, the report said.
“International tourism has been especially sluggish in returning due to a sequence of COVID-19 restrictions followed by inflation and the 2025 shift in immigration enforcement, which has increased caution among some international travelers,” the report said. “Increased federal immigration enforcement efforts in some L.A. neighborhoods may have also impacted spending at local businesses.”
Mega events
With a cluster of major sporting event venues located within Carson, however, it is inevitable that the South Bay will see increased tourism — but will it be short lived?
The region will need to make major infrastructure updates if it wants long-term beneficial impacts, the report said.
“These events create a platform, but revival is not automatic,” the report said. “Outcomes will hinge on transportation reliability, airport and regional access, visitor experience and safety, and marketing that connects visitors to South Bay destinations, not just central Los Angeles. Executed well, the upside can be sustained; for example, there is evidence that West Harbor investments show long-term benefits. However, executed poorly, the result will be a short-lived spike and a missed opportunity.”
The risks outlined in the report include traffic, transit reliability and security coordination.
“The near-term upside is clear: increased visitation, spending, and global media exposure,” the report said. “The larger opportunity, however, lies in pulling forward investments in transportation, public space, and safety planning that can deliver long-term value if designed and executed well.”
