Welcome to San Diego Blog | January 25, 2013
Balanced San Diego Condo Market
The health of the San Diego housing market improved substantially in 2012. Shrinking inventories and a glut of buyers led the Downtown San Diego condo market to some real appreciation.
In fact, MarketPointe Realty Advisors quantified this at year end, saying that Downtown San Diego condos had appreciated by “approximately 1% per month.”
Our experience over the past several months had indicated that many segments of the Downtown Condo market strongly favor sellers. Particularly at the low end of the pricing spectrum. My recent listing at Palermo received 9 cash offers and wound up closing in less than 3 weeks, at a price more than 10% above asking price.
The most recent Market Absorption results for San Diego condos on our Welcome to San Diego website provide some important insights. Downtown condos up to $750,000 all saw significant drops in days of supply and increases in price.
In fact, there is less than a one month supply in all price categories up to $600,000, and only a 3 month supply in the $600,000-750,000 range.
Defining a Balanced Real Estate Market
A Balanced Real Estate Market has approximately a “6 month supply of homes.” This implies that the number of homes currently listed is equal to the number of homes sold in the past six months.
When the number of homes listed is less than the past six month’s sales, it is statistically, a sellers market. When there are more homes listed, it is a buyers market. Sellers of homes less than $600K have been ecstatic, while buyers at the lower price points have clearly been frustrated (by multiple offers and sale prices higher than listed).
The Sweet Spot for Downtown Condos
Inventory pressures and higher home values have created opportunities for both buyers and sellers in the middle price ranges of San Diego Condos. Since mid 2012 we have maintained a consistent supply of 5-7 months in the $750-1 mil price range.
More homes have been listed as home prices have crept up. The Columbia District is a location where this is most definitely seen. Recent sale prices in buildings like The Grande and Bayside have demonstrated a “move up/move down” opportunity for sellers.
These are not rushed or distressed sellers. In fact, the value proposition has changed so significantly that owners in Bayside who purchased two years ago are moving to larger places on higher floors.
A Buyer’s Market
It is noteworthy that there is currently a larger supply of homes over $1 mil than in the category of $750-1 mil. This is influenced by the handful of Downtown Penthouse Condos that remain developer owned in Bayside and Sapphire Tower.
These are the premier San Diego Penthouses built in the past five years. Design elements and spaces in excess of 3,000 square feet may never be duplicated.
Both developers just reduced prices by several hundred thousand dollars! It’s a clear indication that this is not the segment of greatest activity.
To talk more about buying or selling Downtown San Diego condos, contact David Manes, San Diego Realtor. firstname.lastname@example.org or 858.432.3203.