Welcome to San Diego Blog | April 3, 2010
Downtown San Diego Real Estate Market Trends April 2010
I frequently get phone calls from investors looking for 2 bedroom 2 bath condos in the low $200,000 price range for Downtown San Diego Condos or Lofts. The reality is that the affordable segment of the market is really experiencing a lot of sales right now and the level of competition in this market segment is high.
Where are the REAL DEALS for condos downtown San Diego?
The absolute best deals are going to be found in the market segment with the least competition amongst buyers. If a seller needs to sell, they will have to lower their price until a buyer agrees with them on the price. This “buyer agreement” comes in the way of an offer to purchase the property. The market segment with the least amount of sales is the luxury condo market at $1m or more. In the past 12 months, there have only been an average of 2.67 sales per month for million dollar plus properties. If you look at the current trends, there has only been an average of one home sale per month for condos costing a million or more in the last 3 months.
What does this mean for Luxury Condos San Diego?
Based on current market trends, we have approximately a 6 year supply of condos listed for sale at over $1 million. Anything over a 6 months supply is considered a buyer’s market and with a 6 year supply, this means prices are going to have to come down for these luxury condos San Diego to be absorbed by the market. We are negotiating some great deals out there on luxury condos. We recently sold a Penthouse at Legend San Diego for half of what it once sold. We are talking 21st floor, bay views, 2 bedrooms with den and a 320 sq/ft balcony and we negotiated it down to $835,000!
We are seeing phenominal deals at Bayside San Diego Condos and expect to see more great deals as we see the high-end luxury market continue to fall in value. Many of the condos that were once valued at well over a million have fallen below this benchmark number. Some people refer to the stretch of Pacific Coast Highway where The Grande San Diego Condos, Bayside, and Beeza are located as “millionaire row”. If property values continue to fall for the luxury condos as they have been, then it will have to be renamed…I welcome any suggestions for the new name.
Based on simple economics, the lower priced homes that everybody wants to buy right now are really not considered a buyers market. A market becomes a “buyers market” when there is a surplus of a six month supply of homes. If we look at the statistics for condos and loft sales in San Diego’s Downtown 92101 zip-code, you will see that there is LESS than a 6 month supply of homes for condos up to $450,000. Does this mean you can’t get a great deal in this price range? Absolutely NOT, but it does mean there is more competition amongst buyers so you must act quickly and not try to buy too far under the list price. In many cases these homes are selling at or above list price.
Overall, we expect to see the market compress. The low end of the market appears to have hit a floor and has started to rebound, but the top end of the market continues to fall, therefore creating the compressed market. For specific questions regarding property values or trends, please respond to our post or give us a call at 619-309-8011.