Welcome to San Diego Blog | June 8, 2010
Cash Buyers Swooping up Downtown San Diego Real Estate
Despite the economy still not being as healthy and robust as most would like and the recent volatility of the stock market, there are still a large number of people that feel confident enough in San Diego that they are willing to park their cash into Downtown San Diego Real Estate. Of all the sales for downtown San Diego condos in the month of April, 42% of them were cash sales.
What does this mean for buyers? This translates into stiff competition amongst buyers becuase buyers with cash can generally close escrow quickly and don’t have to deal with the many issues that finance buyers encounter when trying to get a loan for high rise condo buildings. Buyers with cash can often negotiate lower prices because of their ability to purchase without an appraisal, despite any litigation or owner occupancy issues.
San Diego’s Luxury Condo Market Rebounds
The luxury condo market has a solid rebound after a lull for the past 12 months. After a near disastrous 2009, the luxury market appears to be making a comeback, driven by growing buyer confidence, improved financing conditions and more-realistic seller pricing. Despite the housing downturn, attractively priced homes in some of the nation’s most coveted neighborhoods are selling, sometimes fast and sometimes with multiple offers. Nationwide, sales of homes selling for $2 million to $5 million in the first quarter totaled 2,461, up 32% from a year before, reports CoreLogic.
In San Diego, luxury condo sales are up by over 200% from this time last year. For the Month of April, we saw a total of seven sales over $1 million this year and last April we had only three closed sales in this same price category. It appears that consumer sentiment is much better about the Downtown San Diego Real Estate Market. One of the key elements we attribute to the increase in San Diego luxury condo sales are the great prices. Many Condos downtown San Diego that fall into this luxury category have taken a decline to price by as much as 50%.
Still, the largest segment of the Downtown San Diego condo market is $300,000-$500,000 price range. This is where most people can qualify for financing and is also where investors want to buy great rental condos. The question really isn’t “Are prices going to go up?“, but rather, “When are prices going to go up?” The Downtown San Diego resale condo market in the $300,000 to $500,000 price range is averaging approximately $359 per square foot. Developers can’t buy land, build new class A high-rise buildings, sell for anywhere near that price and still make a profit so it is inevitable that prices in Downtown San Diego will go up. Nobody is going to take all of the risk of starting a new high-rise condo project unless there is a solid profit involved.
Buying A Luxury Condo Downtown San Diego?
We currently see some great opportunities for the luxury market because we still have about a 1 year inventory of Downtown San Diego condos that are priced over $1 million. A balanced market is considered to be a six month inventory so it is still a buyer’s market for luxury condos downtown San Diego.
Contact us Regarding Luxury Condo Opportunities and we will put together a FREE report Detailing Downtown San Diego’s best condos in your price range.