Well, maybe the developer could get the land for a buck, just like McMillan did… no, only the San Diego City Council is that stupid.
As to these condos, a company I used to work for did the alarms and option home-theater wiring. There’s no freakin’ way I’d pay over half a million dollars for a condo in da hood, with some of the worst floorplans I’ve ever seen. These tall-n-skinny tcondos would be a total pain in the ass to actually live in. And any potential buyer will see that as soon as they walk in the door and climb all those stairs. Without suicide loans, flippers and 30% / year appreciation, these projects make no sense at all.
Resale value in 2012: 200 – 250K. Maybe less, depending on the amount of pain in the SFR market. Just consider the likely buyers, and what they will be able to afford with 20% down, 30-yr fixed, at the higher interest rates we’re going to see in a year or two. That’s what those people will be able to pay, and that’s what these units will be worth.
Hint: the buyers won’t be lawyers, doctors, engineers, etc. They’ll be teachers, city workers (the shovel-wielding kind), mid-level construction guys… blue-collar or low-paid professional types. If you really want to know where any property is going, combine the target market with real financing, and there’s your value.