San Diego Housing Bubble News and Analysis

San Diego high-rise condo market goes from frenzy to fizzle

http://www.latimes.com/business/la-fi-co...

"From 2001 through 2008, more than 8,000 condominium units were built in downtown San Diego. That's double the number of downtown units constructed over the same period in Los Angeles, a city three times its size. So while sales of urban high-rise units are convulsing elsewhere, nowhere is the collapse more dramatic than in downtown San Diego."

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the article even talks about the naked guy

Here's a quote from the article:

"Maybe some of my friends will be able to live there instead of having to go to Tijuana or Temecula," he said.

What a low blow to Tijuana.

"About 400 new and occupied ones are listed for sale, and more than 450 are in some stage of foreclosure and will eventually be put on the market. An additional 1,000 units that were under construction when the market soured are slated to be completed this year, adding to the glut and putting further downward pressure on prices.

So far this year, 159 new homes have been sold downtown, according to DataQuick. At that pace, it would take several years to sell all the units recently completed or being finished this year. Developers are holding units off the market."

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let's see, 159 sales in 6 months is almost 27 per month

we have 400 + 450 + 1000 units which means there are almost 6 years worth of condos downtown at the current rate of sales

ouch!

I used to giggle at the guy over at Ben jones site who would post:

I say: “San Diego condos for EVERYONE!!

It is going to get UGLY downtown. I met a couple a few months back that lived in a building over in little Italy. This is a nice building, built in 2001, I've known several people who live there. It is a big building though, and it has a ton of units. Anyway this couple reported that more and more of the units are becoming rentals. Apparently many of the tenants are young and are turning the place into party central on the weekends, throwing things off of balconies and taking over the pool area for big drinking bashes. Just imagine what's going to happen when the rest of the dark towers downtown turn into rentals. There are so many units the rents are going to get pushed down in a hurry. There is going to be total mayhem, lots of partying and drinking and running wild through the halls.

Damn I wish I was 20 again.

Maybe SDSU should purchase one of the towers...Vantage Pointe?

Don't mean to be disrespectful but I think that's a complement to Tijuana, imho.

"Just imagine what's going to happen when the rest of the dark towers downtown turn into rentals. There are so many units the rents are going to get pushed down in a hurry."

San Diego's next low-rent district ...

A friend of mine lives in a high rise close to Little Italy. The condo next door was being rented by the day, mostly weekends. One night two couples entered his place at 2am carring beer cases. After some shouting, it was clear that the couples could enter the wrong condo because the developer never changed the door locks. All condo doors could be opened with the same key. Today that condo next door is in foreclosure as is the identical 700 s/f studio unit above my friend's place. My friend bought in 2005 for 460K, the foreclosed unit above is going for $250K.

Yeah, but has he changed his locks?

And more importantly, did he keep his old key so he could get into the other units?

It is not obvious from the online article, but did you know that in the print additon it wasn't just a little thing in the business sction.
It was on the FRONT page of the paper.

I don't think that's correct.

First of all, 400 units listed for sale and 450 units "in some stage of foreclosure" are partially overlapping sets.

Second of all,

http://www.signonsandiego.com/sdhomes/ar...

UT shows 129 new & used units sold in 92101 during last month alone, 81 units sold in May, 83 units sold in April.

So we really have ~6 months of active inventory + ~12 months of shadow inventory downtown. That's still a lot, but on par with high end zips such as Del Mar and Coronado.

At the same time, some nearby condo zips are actually experiencing shortages (Mission Valley is at 2.5 months of active inventory, University City is at 2.8 months), extra supply downtown can be absorbed by overflow from those two.

Eugene, you should be working for
Lew Breeze.
Despite his attempts at painting a rosy picture out of the inventory Downtown, foreclosures are continuing to pile-up and peak buyers are dropping one by one.

We shall see what this winter brings....

Ad hominem attacks, eh?

Eugene, I see no point in addressing the substance of your argument or producing evidence against your claim.

I will let time do that. As I said, we shall see what the winter of 2009 brings to Downtown San Diego.....

But you do see a point in attacking me personally, which makes me wonder, what's the purpose of your being on this site?

"So we really have ~6 months of active inventory + ~12 months of shadow inventory downtown."

plus another 1000 units coming online this year

another thing not addressed in the article is that people are realizing that living downtown isn't all that great a lifestyle - street people pissing on the side of your home doesn't really make for Shangri-la in most people's books - "Come on over for dinner, Margie, just ignore the homeless and urine smell on your way in" - families are also realizing that raising Johnie and Janie in the middle of a big city isn't what they thought it would be - the idea that people shopping in other condo markets will "overflow" into downtown is a stretch IMO

1) According to SDlookup there are 545 units for sale on the MLS, plus many hundreds more of developer inventory, plus shadow inventory.

2) The UT sales numbers you quoted include developer sales and the majority of developer units are not listed on the MLS since they are direct sales to the home-buyers.

Eugene, I didn't attack you personally. I questioned your revision of the data.

You may question the purpose of my being on this site just like I question your data.

As I recall, you put your neck out there and called the bottom in Q4 after you bought your house. It's up to you to defend your position.

I completely agree. Downtown living is not for everyone. I know people who run out of room living in their small units. Those apartments aren't very inviting when stuffed full of junk.

Friends and family visiting from the suburbs usually come only once and never return because it's hard to find free parking.

People who do own Downtown get tired of paying $500+++ in HOA every month. The restaurants are expensive; and after ownership expenses, people don't really enjoy Downtown much anymore.

I was merely going by numbers quoted by the article and then re-quoted by 4plexowner. My own knowledge of downtown is fairly limited. If you have reliable data as to the real amount of active inventory that is not on MLS, which is in disagreement with the article, by all means let's hear it. If you think that 2.5 months of inventory in Mission Valley (perhaps half of it contingent) are irrelevant, explain why.

You recall incorrectly, I did that in Q1, and I always talked exclusively about SFR's, Q1 may or may not have been bottom for condos, though current inventory numbers outside DT seem to indicate that it was. My position is defended by numbers on my blog.

I don't think so AN. I'll see the bottom coming when I see it.

It's very different from having called the bottom and putting money at risk, then hoping you were right.

I can still be right. But if you were wrong, there's no way to make it right.

AN, I meant to say that I can still purchase at the bottom since I don't believe that the trough was reached yet.

But since you already purchased on 12/08, you have much more at stake than I do for the bottom to have been Q4 2008.

Once you act, you're bound by your decision. But if you're watching and prepared to act, then you have more likelihood of making a better decision.

Or course, by waiting, I could also making a worse decision. But I don't have any vested interest in past data since I'm still looking forward.

Time will tell....

BTW, buying is not the same as calling the bottom. I did say many many times hear that I suspect we'll see a slow slow real decline (adjusting for inflation) for many years.

Only time will tell.

OK sure your kid would learn invaluable lessons in street smarts, and maybe get into a very lucrative career in trafficking of different sorts, but Temecula does have some advantages over Tijuana it just takes a while for the place to grow on you.

Using the same logic, can I sell at the top if I don't believe the top has been reached yet ?

Well good luck to you guy's looking for that bottom, I don't think I could time it myself.

Just remember the Pigs (not pigg's) get slaughtered rule works in both directions.

pigs only get slaughtered if prices spike up. if they gradually tend up then no, pigs dont get slaughtered

Yes, you can.

From what I see, many condo owners, Downtown, are still waiting for the top to sell at a profit. Since they bought at the high, what choice do they have but to wait for the top they were expecting?

Waiting only works if the sellers have the wherewithal to wait it out. Foreclosure, however, may take care of the waiting for them.