Downtown Condo Stats

[davelj]

I subscribe to a website that tracks virtually all SD downtown condo listings and sales (MLS only). Here are some sobering statistics.

The average sales price/sq. ft. for downtown SD condos for the first three weeks of July in ’05, ’06, and ’07 were $657, $602 and $526, respectively. That represents a two-year decline of almost 20%. These numbers might be a little off due to small sample sizes for each period, but they’re probably in the ballpark. Even if the decline is 15% it’s pretty bad.

There have been 32 closed sales in downtown during the last month and there are 492 condos available for sale per the MLS. (There are probably another 300-500 completed units available for sale by developers.) So, there are about 15 months of MLS inventory available downtown. Add in the developer units and you get a very ugly picture, even after adjusting for developer units sold.

The 32 sales over the last month sold at an average price of 4.6% less than the most recent listing price. Of course we know that most of those prices had already been dropped a few times and the condos re-listed previously. The average days on market for these sales was 73, but of course that’s a joke due to the ability to take the property off the market and then re-list. DOM stats have become almost worthless.

Bottom line: it’s ugly and getting uglier downtown. But sellers remain pretty stubborn, which of course won’t last. I suspect that the average price/sq. ft. is headed for the $350 – $375 range over the next few years, or another 30%-ish decline from here. But, I could be wrong.

[barnaby33]

The burning question is, is your name Dave, or Davel? Oh and do you follow downtown as a canary in a coal mine, or because you want to live there?

Josh

[barnaby33]

The burning question is, is your name Dave, or Davel? Oh and do you follow downtown as a canary in a coal mine, or because you want to live there?

Josh

[sjk]

Thanks for posting that, nice data points. No, I don’t think your wrong on where price per sq.ft.is going. I suspect your price is a little high. It may settle there(in real terms), but it will drop much lower before it recovers.

What we have just seen in the real estate market the last few years will end only with a magnitude of pain not seen since the 1930’s.

Regards,

[sjk]

Thanks for posting that, nice data points. No, I don’t think your wrong on where price per sq.ft.is going. I suspect your price is a little high. It may settle there(in real terms), but it will drop much lower before it recovers.

What we have just seen in the real estate market the last few years will end only with a magnitude of pain not seen since the 1930’s.

Regards,

[davelj]

My name is Dave, although Davel would be more exotic and mysterious, yes? I follow downtown because I already own here and would like to acquire more units here, but at substantially lower prices. I bought downtown last year in a very odd transaction under which the seller accepted almost all of the downside price risk in the unit through 2010 while, in exchange, I gave up all of the upside potential over the same period. The two main characteristics of the seller that were necessary for the transaction to work were (1) he had a big chunk of equity in the unit (which I expect him to lose in the transaction), and (2) he was a “true believer”; that is, he truly believed that the unit would increase beyond his original purchase price “given more time” (he was already $80K underwater on the unit when he sold it to me). So, while I own downtown, I would like to see prices crater because I’d like to buy a few more units for investment purposes. But, if they don’t, no big deal. I’ll just pay the guy off and that’ll be that.

[davelj]

My name is Dave, although Davel would be more exotic and mysterious, yes? I follow downtown because I already own here and would like to acquire more units here, but at substantially lower prices. I bought downtown last year in a very odd transaction under which the seller accepted almost all of the downside price risk in the unit through 2010 while, in exchange, I gave up all of the upside potential over the same period. The two main characteristics of the seller that were necessary for the transaction to work were (1) he had a big chunk of equity in the unit (which I expect him to lose in the transaction), and (2) he was a “true believer”; that is, he truly believed that the unit would increase beyond his original purchase price “given more time” (he was already $80K underwater on the unit when he sold it to me). So, while I own downtown, I would like to see prices crater because I’d like to buy a few more units for investment purposes. But, if they don’t, no big deal. I’ll just pay the guy off and that’ll be that.

[SD Realtor]

Dave I believe downtown will indeed crater. My seller is holding their breathe as we are in escrow but another unit in the complex he is in just lowered their price by over 100k on a short sale. He is already in escrow at close to 100k under his purchase price of two years ago. I can see if running down even more as long as investors don’t start bailing people out. The other thing about downtown are that HOAs in the nicer places are pretty brutal. In his building they are about 540 a month.

SD Realtor

[SD Realtor]

Dave I believe downtown will indeed crater. My seller is holding their breathe as we are in escrow but another unit in the complex he is in just lowered their price by over 100k on a short sale. He is already in escrow at close to 100k under his purchase price of two years ago. I can see if running down even more as long as investors don’t start bailing people out. The other thing about downtown are that HOAs in the nicer places are pretty brutal. In his building they are about 540 a month.

SD Realtor

[Anonymous]

rona:

What is the sound of a condo project crashing?

Is my experience in the mid-80’s yields anything, it is the knowledge that there’ll be projects that convert to rental housing in order to keep the market from totally collapsing. I expect this will be sooner rather than later, but there is no telling the urgency or stupidity of developers!

[Anonymous]

rona:

What is the sound of a condo project crashing?

Is my experience in the mid-80’s yields anything, it is the knowledge that there’ll be projects that convert to rental housing in order to keep the market from totally collapsing. I expect this will be sooner rather than later, but there is no telling the urgency or stupidity of developers!

[capeman]

$250 or less per sqft…

and I’m seriously considering it. That’s about what they should be if not less.

[capeman]

$250 or less per sqft…

and I’m seriously considering it. That’s about what they should be if not less.

[barnaby33]

Capeman, why do you say 250 is what they should be? What your reasoning?

Josh

[barnaby33]

Capeman, why do you say 250 is what they should be? What your reasoning?

Josh

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