Thursday, May 8, 2008 at 06:26AM
Downtown SD Condos Update
Smithers asked about the trend of downtown condos - is there any uptick? Not really.
This graph shows the monthly median sales prices, and the $-per-sf over the last three years. As you can see, they fluctuate wildly, so the RED trend lines are probably the better indicator:
Sales haven't improved either, and March or April have been the best months of the year lately. But between 2005 and 2008 the closed sales have dropped 44%, from 102 t0 57 closings last month.
There are currently 595 active listings of downtown condos, not counting all of the brand new units being sold by developers (though 83 of the 595 are listed as being built in 2008). The unsolds are averaging 107 days on market, and $664/sf, where April's closed sales averaged $509/sf, which was the highest month of the year.
There are always going to be the high-priced fancy ones at the top skewing the numbers. When looking at last month's 57 closings and taking out the 12 closings over $900,000, the numbers look more realistic. There were 45 sales averaging $437/sf.
As long as both sales and pricing are trending downward, it would seem that we have a ways to go - on average. But we really should factor in another variable - the view - making the analysis multi-dimensional. A case could be made for 2 br condos being real popular when priced in the $300/sf to $400/sf range - if you can find one with a good view for $400/sf, it's probably worth a look.
Jim the Realtor
9 Comments
View Printer Friendly Version
Email Article to Friend
Reader Comments (9)
Thanks, JtR. Yes, lots of varibles. View is big, but also building location & age, construction and feature quality, HOA competency, dues and solvency, owner occupancy, etc.
IMHO people really need to consider the HOA scenario. I've got a strong feeling the HOA's are going to start going through the roof (as if they aren't high enough yet). I've seen some that have popped $100-$150 recently and from what I can tell it has mostly to do with the number of units that are in the rears on their "dues".
This trend is likely to get worse and the HOA's are going to be usury in the not so distant future. I'm guessing the first thing people stop paying are their HOA's followed by their taxes and then finally their mortgage.
It's also important to consider sub-markets in downtown San Diego. East Village versus Little Italy are two completely different stories. Something similar to an east/west of the 5 scenario.
From the U/T March 2008 DataQuick numbers;
Resales 3/07= 54 ($565K)
Resales 3/08= 45 ($534K) -5.5%
New 3/07= 55 ($425K)
New 3/08= 55 ($641K) +51%
Average +18.0%
Yes, there are a lot of variables in 92101. Marina High rises are much different from 2-story East Village.
But I feel strongly that +51% for new condos is skewed because the Electra Tower went up with 200 units around or over $1,000,000. What's not reported is that most of those buyers put their 10% down a long time ago, and now they're totally underwater. The MLS is flooded with those units which are now 100+ DOM and well below original sales price. Now they're all resales, not new. That building is EMPTY. I also believe it's a similar story for Icon, Smart Corner, and other towers. Let's not forget about Bayside and a couple others that are going up. Can someone say "inventory?"
To further exacerbate the problem, HOA's for these buildings are around $750/mo. That alone is about $100,000 buying power wiped out if you're taking on a mortgage. That's a big pill to swallow, and it probably won't get any better. Those HOA's are full of old ladies (no offense to old ladies) who want their windows washed 5 times a year, someone at the front desk at all times, the hallways vacuumed twice a day, etc.
Finally, the UT is a total homer when it comes to real estate. It's right there with the NAR. And DataQuick seems to be their lackey IMO.
Thanks for the data Jim. More great info, as always.
Good article Jim. Glad to see there are at least some RE professionals not spinning all the bad news. This was balanaced and fair. I think the trend is still lower through '09 and as rates keep creeping up, that continues to push prices lower for the foreseeable future. I'm still on the sidelines for now. Keep up the great work.
This is really good info. and insight! Well done!
Nice analysis. I need to put together something like this for my local market.
Interesting article on condo sales. They specifically mention San Diego at the end of page 2.
http://www.nytimes.com/2008/05/15/business/15condo.html?_r=1&oref=slogin