Downtown Condos

[EconProf]

Wither downtown condos? Piggington has had plenty of news and opinions about price trends in various areas. But does anyone know what the price trends are for the many downtown condos that popped up in the last two decades?
I suspect they are hurt by the remarkable surge in homelessness in that area, plus COVID. The latter encourages working from home, which is much appealing in a larger suburban or rural house. In addition, COVID has shut down the restaurants and nightlife that once gave downtown an appealing vibe. Any data to support these suspicions?

[spdrun]

They seem to be extremely abundant on the market, but not (yet) particularly cheap compared to even 5-6 years ago:

https://www.sdlookup.com/Browse/All/92101

Also, isn’t everyone operating (and buying) under the assumption that most vulnerable people will be vaccinated in 1-2 months and nightlife/offices will reopen? I imagine that if hospitalizations for COVID plummet, this summer will be a redux of the Roaring 20s with more booze.

[gzz]

I did a little research and I think SDR confirmed, downtown condos were just about the worst performers in SD real estate.

I don’t think it has much to do with the issues you mention, and is almost entirely about a rapid increase in supply.

Homelessness does degrade DT’s quality of life, but in many other ways downtown has gained amenities, and it has always been an issue there. In fact the Smart Corner condo complex was derided as Soup Corner 10 years ago because it was next to a soup kitchen and similar amenities.

From 2005-2015, price per sq foot was just really high downtown, encouraging rapid supply growth. The supply growth meant the premium downtown condos had over other neighborhoods gradually vanished by weak appreciation.

[sdrealtor]

Downtown has always had plenty of supply and looking at it now it does not seem extraordinarily high. Of course compared to the rest of SD where its plummeted it is comparatively high but not significantly more than historical. Just my 2 cents but I think the homelessness and dense living being out of favor work against it. The other issue is high HOA fees make returns for investors unfavorable. Long term I think its best suited to second homes, empty nesters and retirees. SD is beach centric and young professionals will choose beach locations over active downtown life unless rents drop a ton there which is tough due to the high fees IMO.

[The-Shoveler]

Don’t know much about SD downtown, but in LA downtown the math just does not work for luxury condo’s/apartments,
The percentage of people who work downtown who can afford these is very small first of all (most who live in them actually commute to the burb’s to work as that is where most High-Tec jobs are really in LA).
LA downtown has really gone downhill over the last few years (even before pandemic), after a previous few years of renewal.

IMO WFH is the new normal now and Office work will likley never be the same as it was.

[sdrealtor]

And you’ll be back in SD! I know a good realtor LOL

[brg654]

it’s a supply/demand issue. many of the condo units are investor-owned, and the supply of the new apartment building downtown have capped rents. meanwhile, the HOA fees on the condos with full amenities (namely, pools) have crept over $1000/month. the combination of supply limiting rent increases, demand during covid being tilted toward larger spaces and SFR, and exorbitant HOAs have made these units less appealing to investors.

[scaredyclassic]

I was looking at a listing with a 1300$ hoa fee in a downtown condo near whrre im living a few months.

1300!

Jeez. Its like you never get out from under your monthly payment

On the other hand, theres a pool on the roof. I kind of need that.

What happens in an earthquake. Do i slosh over the side.

I really like this downtown condo lifestyle. Im sitting in one right now
adjacent to petco park. Id buy season tickets.

1000 hoa just ridiculous tho. I think id just rent downtown. I think the unit we are in would cost like 420k. 600$ hoa 600 taxes ins, so like 2700 a month with 20 perc down. Not very enticing. Pretty sure it wouldnt rent for that. Tiny. Not great for roomates

[gzz]

The DT condos that are $1300 have resort amenities beyond just a pool. I assume you mean the marina district ones. They are for active seniors mainly who actually are home all the time and use them.

One large cost can be 18 or 24 hour doormen. It really is a nice feature IMO.

Taxes and insurance on a 420k condo will be more like 410/mo if owner occupied and a tad higher for a rental.

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