Welcome to San Diego Blog | March 8, 2010
Downtown San Diego Condo Market | Healthy & Robust in 2010
We’ve all heard it said that the condominium market downtown San Diego is over-saturated, but this isn’t necessarily the case. In 2009, the downtown San Diego resale condo market experience its second most vibrant year in history. Surprisingly enough, almost 600 condominiums were sold and this number does not include new condos San Diego. 2009 was only outperformed by 2005 and that year the peak of the largest real estate run-up in the last 100 years.
At the beginning of 2010, there were 650 units listed for sale downtown and now there are less than 450. Based on the simple economics of supply and demand, this would leave us to believe that the market has hit a plateau and could be on its way to recovery. Unless we get a glutton of Downtown San Diego Foreclosure Condos that come on the market, we expect to see more of a seller’s market.
Typically, the market is considered a balanced market with a six-month inventory and today we are down to approximately a four month inventory. The lower end of the market is especially seeing a seller’s market as condos downtown San Diego below $450,000 are being bought up quickly.
One of the Downtown San Diego Condo resale statistics that we closely follow is how the top end of the market is faring. From that standpoint, 2008 and 2009 were almost identical to each other with the top 10 sales averaging $2,400,000 or almost $1,000 per square foot.
Those units were typically 2,500 square feet and with dazzling and unobstructed water views. Today, there is approximately a 54 month supply of condos that are priced over $1m. We certainly expect that it will take some time for the luxury condo market to recover.
More than 500 units were sold in downtown San Diego New Condos that had units remaining for sale in 2009. The four leaders were Aria, Bayside San Diego, The Mark Condos and Park Terrace. These projects sold a total of 230 units in 2009. The average unit in these four condo buildings sold for almost $700,000 in 2009 or $561 per sq/ft.
Based on the current inventory remaining for sale in those four buildings, we expect to see Aria, the Mark and Park Terrace sold out within the next few months. Projections for the three Columbia District projects, including Bayside San Diego, Sapphire Tower and Breeza, estimate they will be sold out by mid-2011.
There are not any new condo projects on the books for Downtown San Diego for the next 3 years so as the economy recovers and the inventory shrinks, we expect to see a healthy downtown San Diego condo market. The only two new condo projects that may still be for sale in 2 years time are Vantage Point and Smart Corner. Given the locations and overall desirability, I should expect to see a lot more resales taking place rather than new sales.
Some of the statistics provided by Alan Nevin at Marketpointe Realty Advisors.