Time lags largely explain why they are still building condos downtown. Before building started, they had to spend years doing feasibility studies, market analysis, design and planning of the building, working through San Diego’s onerous Development Services Department, gaining control of existing properties & vacating them, etc.
Only then could they start building.
So the investors and their lenders commited themselves and began spending big bucks years ago, just at the top of the market. You can be sure they are losing plenty of sleep now about their decisions.
As to what will happen to these buildings now in the pipeline? My guess is government-owned public housing. The San Diego Housing Commission will own them. The latter has done some building and rehab of existing buildings on its own–all at mind-blowing cost on a per unit basis. The recent bailout bill includes new funding for this. With the values falling inexorably of downtown condos, combined with a rising cost of government to build anything, pretty soon two lines will cross on a graph.
