February 28, 2006 at 11:49 AM #6389blahblahblahParticipant
This article about the SD downtown condo market is up on yahoo news today.
There are some real gems in here. Someone mentions a unit purchased in 2003 for $500K that’s currently for sale, although the price has recently been dropped from $1.2M. Apparently, this is one of those “…awesome deals” that a quoted realtor is so excited about. Unfortunately, all of this darned bubble talk is scaring buyers away, according to another realtor mentioned in the article. Hmmm, I would have thought that $5000/mo mortgage payments, crazy suicide loans, crackheads, transients, and sky-high HOA fees might be keeping the buyers away, but of course I never got my broker’s license, so what the heck do I know?February 28, 2006 at 2:14 PM #23531DiveUrgeParticipant
I saw this one and it struck me as odd that there’s still flipper optimism. Making $500K in 2 years by screwing someone into a life of debt isn’t something that would help me sleep well at night…
“London said he paid about $500,000 for the unit in 2003. He originally asked $1.2 million for the unit and has had to drop the price.
“But even if I were to reduce my price to $1 million, that still would be doubling my money,” London said.”
What if London had to drop it to $400K? I hope it happens…February 28, 2006 at 3:10 PM #23532RightSideParticipant
I think your anger against people who are profiting from the real estate bubble is misplaced. I for one am glad that we live in a free market economy where people are responsible for their own decisions and free to profit or loss money based on their own free will.
I’m happy that London is able to make $500K in two years and am even envious of all these San Diego flippers who bought over 4 years ago. I certainly wish I had bought a lot of real estate 4 years ago, but I had no idea the market would run.
He certainly isn’t “screwing” anybody. Anybody who buys the condo is doing it of their own free will and they are “screwing” themselves. Its time people own up and take some personal responsability for their actions. We fought a 40 year cold war to defeat communisim, but judging from some of the comments I hear about people always blaming someone for their own problems, you’d think California is trying to become a communist state.February 28, 2006 at 3:34 PM #23533BugsParticipant
A yr2003 sale at $500k probably wouldn’t sell for $1,000,000 now no matter what, UNLESS the contract was negotiated well in advance of the completion of construction and was not actually a 2003 contract. Mr. London is a well known local RE consultant in the area, so no doubt he has benefitted from both his expertise as well as his personal and professional connections. So yeah, I would anticipate such a person would be making good investment decisions downtown. I would also anticipate that he knows when to hold ’em and when to fold ’em.February 28, 2006 at 4:57 PM #23534FarlsParticipant
The condo market stalled a long time ago. I was a pretty good Realtor in San Diego for the past 7 years and specialized in resale condos. I left the business last August and now am semi-retired in Asia.
All this talk about condos increasing in value in the last year is B.S..
A few examples:
I had a client whose property I sold a year ago in a good complex on the 56 corridor. He bought it a year before in the frenzy with 100% financing…Then a year later he decided to move out of the country and sell.We sold it for $15K less than what he bought it for…When you add commission and closing costs he lost $30K on the deal. Luckily he had profit from selling another property to complete the deal or his only other option would have been to give it back to the lender.
A downtown example:
I had a client who bought pre-construction at Park Place for $440K (only $50K deposit)in 2001…when it was completed in 2003 we put it on the market and sold it in 1 week for $650K…Things were good. He was so happy with the results he bought another pre-construction condo from the same builder in 2003 for $880K in The Grande (Now deposit required was $150K)…It was finished in 2005 and put back on the market immediately…Sold for $959K…When you factor in commissions and closing costs on both the purchase and the sale he barely made $30,000….and He’s lucky to have sold at that time. It wouldn’t sell for that much right now…and the HOA was I think over $800/month…not to mention the mortgage payment if he had to carry it any more months unsold……In a nutshell, downtown flippers made a lot of money a few years ago..but now these speculators would be lucky to get their money back..and as the downtown inventories continue to grow, prices will come down more…
Sorry for the rambling……I just wanted to let people know that these things were really happening a long time ago but somehow the media tries to paint a rosy picture…
FarlsFebruary 28, 2006 at 5:09 PM #23535AnonymousGuest
how can gary london be an objective observer of the downtown condo market? he has real skin in the game and countinues to pump up the market for his own self-interest. lets face it this market is going to implode.look to rental value to determine pricing. who actually wants to live in dt over an extended period of time?.how many people really care about the padres and drunks at the gaslamp?where are the parks,schools,arts,good chinese take-out and dry cleaners? i guarantee 30-40% value loss in 3 yrs. Believe me London will give another head fake and cash his chips in.February 28, 2006 at 5:21 PM #23536blahblahblahParticipant
A more likely scenario is that this property will go for something like $800K, with the buyer convinced (for a while, at least) that they’ve just gotten the deal of the century. Meanwhile, the seller still realizes a big profit. A few months later the buyer realizes that his fingers just got cut off by a falling knife…February 28, 2006 at 6:30 PM #23537powaysellerParticipant
My husband’s boss and his daughter bought a condo downtown last year, that his not yet built. I don’t have any details. Their plan was to hold onto it for many years, and profit from the revival of downtown. I haven’t heard that they’ve backed out.February 28, 2006 at 8:11 PM #23538AnonymousGuest
the sad thing is that your husbands boss is upside down and he doesnt know it.if he doesnt Bail out of his deposit now his lender will chase him into bankruptcy and the rules are different now. His realtor sure as hell wont tell him.
the smart $ is already out of downtown!February 28, 2006 at 10:40 PM #23539BugsParticipant
If the plan is to hold for a long time they probably won’t get burned. It’ll look pretty bad for a while on paper but the overall average will probably still increase as long as they don’t have to sell any time in the next 10 years or so.
I’ve had a lot of people tell me they would consider living downtown. I think there are some empty nesters who at least think they’d enjoy an urban lifestyle once their kids are out of the house. I think there is some demand here for that kind of lifestyle. I’ve just always been skeptical that there was sufficient demand to justify all those high “luxury” rises. There’s definitely demand for affordable housing so the units will sell if they’re priced right for that – but a bunch of people would have to lose a lot of money for that to happen.
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