Welcome to San Diego Blog | October 9, 2012
Downtown Real Estate Landscape…
…San Diego Condos
A lot of things have changed in Downtown San Diego when it comes to real estate over the course of the past 2 years. We saw the bottom of the market in November 2010 in terms of the most available inventory in the lowest price ranges.
Downtown San Diego Condos and Lofts were sitting and screaming to be stolen back then and interest rates were a “sort of” low 5%. I say “sort of” low because we’ve all become jaded with 30 year fixed rates hovering in the high 3% range for the past few months. For those that bought then, pat yourself on the back, investment well made!
Real Estate Downtown San Diego
Today we are seeing prices take dramatic jumps, in some cases, and it’s hard to make sense of the market. We are starting to see traditional sellers enter the market and they’ve been able to command substantial price increases over recent short sales and forelcosure sales. Still, it’s hard to know what the new-new is with Downtown San Diego Real Estate because we have short sales that were contracted months ago closing at low prices and recent traditional sales that were quick escrow sales closing at the same time for similar properties.
When I say it’s hard to give sound advice regarding which properties are good buys, it’s because with the multiple offers and “highest and best” type situation often lead to the land of, “I’m not so sure this is a great buy, but it could be.” Don’t you hate an answer like that! Here’s why you might get an answer like this from a person like me that cares about my clients:
Recent sales examples
- Treo 1240 India St #1900 sold on 6/14/2012 for $460,000 as a short sale
- Same exact property sold on 8/12/2012 for $635,000 with new floors & carpet
- Really? $15,000 in floors and $175,000 increase in 2 months…hmm…?
- Treo 1240 India St #1502 sold on 10/15/2012 for $490,000 as a short sale after being on the market for 47 days. The original list price was $520,000 and it sat on the market.
- Same flooplan on #2002 was sold on 7/05/2012 for $660,000 cash. Did this buyer get worked over?
- In the above case, did the market really change by 20% or more between March and July?
- Treo 1240 India # 1605 sold on 6/15/2012 as a short sale for $235,000. The buyer is doing a $25,000 remodel and has plans to list it at $360,000 in October of 2012. Does the market warrant a $100,000 raise in value in 3-4 months?
- Treo 1240 India Street #2404 is in escrow today at $349,000 and it’s very basic, no real upgrades except for the laminate floors. It is east facing with an ordinary 1 bedroom layout with only $724 sq/ft.
- Is this buyer overpaying or is this the new-new?
As the market evolves, I’m constantly trying to make sense of what is real and what could be foolish buyers inflating the market due to the lack of available inventory and a lack of patience. It’s hard to know what’s to come, but looking back 90 days, there were only 8 properties that sold at auction from banks and this time last year, there were more than triple that amount in the same 90 day period.
Looking at the notice of default list would indicate we are going to see some more properties come to market, but when and how many of them will actually come on as short-sales or bank owned foreclosures? We’ve been hearing about the shadow inventory for 4 years….still not here and prices going up.
I’ll leave you with a final thought…if one buyer overpays, no big deal, but once 3 buyers overpay, now these are the sales comps and the property will appraise so it becomes something that can’t be dismissed…maybe the 3 buyers didn’t overpay and maybe the next sale will be higher….maybe…
Give us a call to discuss what’s next for real estate in Downtown San Diego: 619-309-8011