Welcome to San Diego Blog | December 8, 2011
Downtown San Diego Condo Pricing
When I am showing properties and chatting with buyers, they usually want to know how condos in downtown San Diego are priced. What factors do sellers typically consider in setting a list price?
Because there are many buildings and property types to choose from, my clients want to know if properties are competitively priced, or if prices are more a reflection of the seller’s subjective opinions and desires. Are list prices inflated, or are they an accurate indication of the property’s true market value?
How to Price San Diego Condos
While downtown San Diego condo pricing may seem arbitrary, most sellers in the current downtown market are realistic about what their homes are worth, and usually set the asking price based on recent comparable sales in the same building or neighborhood. Pricing is determined by building type, location, whether the unit has bay or city views, square footage, floor plan, floor height, neighborhood ambience, interior upgrades, and homeowner amenities like pool, sauna, community room, and concierge service.
However, pricing is not an exact science. Ultimately, buyers determine value by deciding how much they are willing to pay for a property. While prospective purchasers may do a lot of “comparison shopping,” they usually make decisions based on what they want, need and can afford.
A recent sale in downtown’s Park Place development illustrates how buyers drive values. A condo on the 18th floor with 1,374 square feet, and expansive San Diego bay and city views sold in November 2011 for $850,000. The sale price was $100,000 more than the closest comparable sales in Park Place and other nearby buildings of the same quality, even though the comps averaged 1574 square feet in size, or 200 square feet more than the 18th floor condo.
Why? This Park Place condo is known for its premier and protected views. It has expansive bay views that will likely not be affected by future development. Park Place has a unique location on Harbor Drive just above the Old Police Headquarters (OPH) where future development will not impede on views of some of its condos. The renovation plans for OPH involve a low rise park for shopping and restaurants, much like Seaport Village.
What dollar value would you give to “forever” views? Only a buyer can answer that question. Factors that influence pricing can go out the window when buyers find what they want.
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