Downtown Condos

[Mr_Brightside]

Rich may recall me as he and I traded emails over a year ago about the downtown market.  I still watch the market closely and am documenting specific examples of units that being sold at a loss.  In my opinion the aggregate data that is used to track the market isn't as useful as specific examples of decline. 

At any rate the people here may find interest in some of the growing examples of a market in decline.

http://sandiegomarketmonitor.blogspot.com/ 

[PD]

I pulled up condos on realtor.com and over 700 showed up.  What is the actual number of condos for sale right now (not including those planned)?  The assoc. fees are pretty big.  It looks like most condos pay at least $500 a month.

We drove downtown yesterday to look at condos and it was not easy.  There were sign people on streetcorners directing people but we had a hard time figuring out where to go.  We ended up at the Park Terrace sales center and I picked up some info.  We gave up after that.

[Mr_Brightside]

Zip Realty shows 720 although a number of those are units that are under construction. 

There are also probably 300-400 units that are apartment conversions that aren't in the MLS but they are for sale.  These are located at the following former apartment rental complexes:

Porta D' Italia (Little Italy)

Atria (Marina)

777 6th Avenue Lofts (Gaslamp)

Metro Lofts (Four seperate loft buildings, East Village and Little Italy)

There are also about 300 units hitting the market this summer at three loft projects which are all in the same area on Broadway and 5th and 6th Avenue.  Aloft on Cortez Hill should be finished this summer.  Gaslamp Square II is also finishing up.  In all these cases there are unsold units hitting the market.

About half of the recently completed tower on Cortez Hill are for sale and not on the MLS as well.

All told of units that are for sale and ready for move in I'm very confident that there are now over 1,000.  Keep in mind no less than seven buildings should be delivered in 2007.  It's really stacking up to be a blood bath in my opinion.  If you're thinking about buying I'd get a feeling for what you like and wait until late 2007.

 

 

 

 

[PD]

We are not going to buy… at least not yet.  If there is a severe correction, we might try to pick a condo up at foreclosure.  We were just trying to get familiar with what is out there.

[john67elco]

lol everytime I scroll through the MLS and see codos I laugh and think of the tickle me condo post.

[powayseller]

My husband’s boss and daughter purchased a downtown condo for long-term appreciation, thinking that the downtown area would become more desireable.

When I heard of this last September, at a time when everyone was still saying RE can only go up, I was doubtful. The daughter bought and lives in a condo in Little Italy. She should know the market.

As far as I know, even after I warned them to get out, they still own the condo.

I’m going to quote from a friend: it’s like telling your friend to stop dating that guy because he’s a loser but she won’t listen and ends up marrying him anyway. Years later, she finally divorces him. You wonder, and now she does too, why she didn’t listen… People buying RE now are like that rosy-eyed girl.

[Mr_Brightside]

I have posted another loser on my blog that just popped up today, this one is almost $100,000 in the red and has a price ~8.5% LOWER than what the current owner paid in 2004.

http://sandiegomarketmonitor.blogspot.com/

[powayseller]

Good finds! This will be an interesting thread to follow.

All this makes me wonder how some economists say RE will go up 5% this year, a slower rate of appreciation. Or the flat landing scenario.

Here we have proof of some units falling 8.5%.

Why can’t they be honest and say, “We expect nationwide depreciation of 2%, and some pockets of cities may even see a 10% drop by summer”. Wouldn’t that be more honest, and accurate?

[4plexowner]

Put yourself in the shoes of the housing industry or the government.

While you are standing in those shoes imagine what would happen if you told the truth.

The truth might sound something like this: “The city of San Diego has allowed several thousand too many condos to be built in downtown. Since there is no fundamental demand for these units, they will languish on the market. The condo builders will reduce the prices on these units until they sell. Homeowners trying to sell will be undercut by the builders who have more ability and incentive to lower prices. Anyone buying a condo downtown at today’s prices should expect to be upside down very quickly and most likely end up losing money. A large percentage of these excess condos will ultimately become rentals and will probably depress the rental market.”

How do you think this news would go over? How long do you think you would keep your job?

Ever heard the expression, “Don’t shoot the messenger?” – you would not want to be the messenger delivering this news.

[Mr_Brightside]

Lot’s of affordable housing on the horizon. If you want to blame someone blame the Federal Reserve as they have created all the cheap and easy credit that has warped the prices of real estate and commodities.

In my opinion we still have a long way to go down.

[powayseller]

Does anyone have any personal stories of people who are upside down on their mortgages?

I wonder what they are thinking about their own fault in this.

I wonder if we’ll see class action lawsuits against lenders.

I wonder what these people will do to pick up the pieces. Move? Do they have money to move?

[4plexowner]

And how do the changes in the bankruptcy laws affect these people when they try to clean up their financial mess?

Federal taxes that are owed due to a short sale of real estate won’t be written off in a bk.

Means testing will be applied as part of the bk process.

I have read (but haven’t confirmed) that NO credit card debt can be written off in bk after the changes in 2005. Can anyone confirm this?

My point is that the changes made to the bk laws in 2005 will make it harder for people to clean up their financial lives and move on.

[davelj]

I personally know a woman who bought a “premium” downtown condo unit for north of $800K about two years ago. She put it on the market several months back for about what she paid for it and got zero offers. She’s already moved to another city to take another job and she lowered the price within the last couple of weeks to $100K less than what she paid for it and still no offers. I’ll keep tabs on the situation and report back accordingly. I think this will become the norm over the next year or so except that places will be on the market for $200K+ less than the original purchase prices.

[Mr_Brightside]

Can you post the building or unit number? I’d like to research that and post it.

[Mr_Brightside]

I have added another entry to my blog, this entry discussed an interesting one bedroom at La Vita in Little Italy.

http://sandiegomarketmonitor.blogspot.com/

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