About UTC condo conversions…

[bubble_contagion]

I have been closely watching three condo conversions in UTC. Two of them converted the first quarter of 2005: Verano and Vicenza. Since then 2 bedroom units have been reduced in price from 420K to 380K. Since February, units are being offered also as rentals at both locations. They are renting for about the same than they did before they started to convert. The third UTC conversion I have been following was done a few years back and sold out. Today it has 20 units for resale at around 430K+ for 2 bedrooms. Inventory has been increasing steadily and resale prices have not gone down. Since the three condo conversions are similar: same neighborhood, type of construction, size, etc. I believe this situation helps to explain why prices of new homes have been reduced by 20% in the last year and resale prices have stayed flat. The reason is not that resale homes are nicer or in better neighborhoods, it is that owners are still hoping that someone will give them top dollar for their properties. I am certain that as soon as one resale units is reduced in price to compete with the new conversions, the other 19 are going to immediatly and do the same. It will just take one.

[bubble_contagion]

It has been three months since I’ve checked the UTC condo conversions and now the lowest priced 2 bed in Lucera are 30K less than in late February. At the peak of the madness, condos in UTC were going up at a pace of 10K per month. It is not unreasonable that now they are coming down at the same rate. By the time prices hit bottom, downtown and conversion condos are going to be so cheap I may buy one just to use it as storage.

[4plexowner]

Let’s see, a 10×12 storage unit is about $185-225/month.

There is a studio condo currently on the market in the east village for 350K. If we deflate it by the 60% correction I am expecting for trash properties, we get a price of $140K.

At $2700/year for a storage unit it would take us about 52 years to break even on the condo-as-storage idea (and that ignores HOA fees, taxes, insurance, etc).

Maybe you and I can split a condo-storage-unit so we each break even in 26 years. This idea has potential …

[bigmoneysalsa]

I rent in Verano. Just this week they lowered the starting price for a 2 bedroom to $360K from a previous $380K on their glossy billboards that are plastered everywhere. Best part is, someone a few doors down from me is trying to flip their 1 bedroom for $350K. Just another example of how the developers get it, and the individual sellers don’t.

[Mr_Brightside]

Can you post the unit number? Also what are comparable one bedroom units going for?

[bubble_contagion]

My idea was not that far fetched! Rich people are now buying condos just so they can use the parking for their exotic cars. Downtown condos, with underground garages, are going to sell like crazy.

Article is Here

[PerryChase]

My elderly auntie is widowed with no children. She sold her house and is looking to buy a one-bedroom UTC/La Jolla condo for retirement. She will live in San Diego 1/2 of the year, and travel the rest of the year. Any advice?

[barnaby33]

Tell her to rent for a while to get the feel of the place. Older people for the most part don’t want or care to understand the complexity of what is happening right now. In a year or so she can buy a 1 bedroom much cheaper than she can today. Since 1 bedroom is the second least desirable layout (studio is the least) they will be hit second hardest on price.

Josh

[bigmoneysalsa]

PerryChase, please carefully read through “A Bubble Primer” on the home page of this site. It would be a very bad idea for your Aunt to by a condo in San Diego right now as prices are poised to fall significantly in the next couple years. I currently live in a UTC condo conversion; I picked it out of the zillons listed on San Diego craigslist every day. She should have no trouble finding something there for a reasonable price and willing to give her a long-term lease.

[SD Realtor]

bubble are you still tracking UC condos? Lucera in particular? That is where I have some clients who bought a 2/2 when it was converted and are now woefully underwater. The listings for 2/2’s there are now in the high 300’s and up. The 2/2’s sold 2 years ago at conversion in the 430’s.
Also did you track La Jolla Regents at all?

[studenteconomist]

I live in the UTC area and was wondering what the rent is going for the 2 complexes that are now renting out apartments? Do you know bubble_contagion? I actually visited the Verano and Vicenza apartments and took a tour of their offerings (to buy) last summer. I was shocked at how much they cost, Verano was trying to sell its 2bed for $450 and 1 bed for $310. It was a total ripoff, and I am sure they will not be able to sell all their units. They will have to go back to significant rentals soon. The funny thing is a friend bought a place late last year in Vicenza and she thinks that her place is worth more now than 6 months ago!!! She is in the mortgage business too. She is going to lose money on her condo and maybe lose her job, yet she still believes that everything is ok. Denile is just too easy.

[jabrwoki]

I know exactly what you are talking about as I have been following the same complex (Lucera) and others having lived in UTC for the past 3 years. The lowest prices advertized now for Lucera 2bedrooms ($399k) is still about 30k more than what homeowners purchased for 2-1/2 years ago. Let us see when the flippers fold to below original list price ($370K). Meanwhile i have heard (from a friend who purchased there) that they had a major plumbing issue for which the residents had to cough up $10k each. This is just the beginning because not too long ago you (and even now in some unrenovated complexes) you can still rent in the $1500-$1700 range. My estimate of fair prices there is about $250k. What do you think ?

[jabrwoki]

I know exactly what you are talking about as I have been following the same complex (Lucera) and others having lived in UTC for the past 3 years. The lowest prices advertized now for Lucera 2bedrooms ($399k) is still about 30k more than what homeowners purchased for 2-1/2 years ago. Let us see when the flippers fold to below original list price ($370K). Meanwhile i have heard (from a friend who purchased there) that they had a major plumbing issue for which the residents had to cough up $10k each. This is just the beginning because not too long ago you (and even now in some unrenovated complexes) you can still rent in the $1500-$1700 range. My estimate of fair prices there is about $250k. What do you think ?

[jabrwoki]

I know exactly what you are talking about as I have been following the same complex (Lucera) and others having lived in UTC for the past 3 years. The lowest prices advertized now for Lucera 2bedrooms ($399k) is still about 30k more than what homeowners purchased for 2-1/2 years ago. Let us see when the flippers fold to below original list price ($370K). Meanwhile i have heard (from a friend who purchased there) that they had a major plumbing issue for which the residents had to cough up $10k each. This is just the beginning because not too long ago you (and even now in some unrenovated complexes) you can still rent in the $1500-$1700 range. My estimate of fair prices there is about $250k. What do you think ?

[jabrwoki]

I know exactly what you are talking about as I have been following the same complex (Lucera) and others having lived in UTC for the past 3 years. The lowest prices advertized now for Lucera 2bedrooms ($399k) is still about 30k more than what homeowners purchased for 2-1/2 years ago. Let us see when the flippers fold to below original list price ($370K). Meanwhile i have heard (from a friend who purchased there) that they had a major plumbing issue for which the residents had to cough up $10k each. This is just the beginning because not too long ago you (and even now in some unrenovated complexes) you can still rent in the $1500-$1700 range. My estimate of fair prices there is about $250k. What do you think ?

[Author]

Posts