Shock and Awe in the Downtown SD Condo Market

[RightSide]

I thought the Professor’s graph of the huge increase in active listings of Condos in downtown San Diego was downright scary.

Then I saw this and fell out of my chair.

Click on this link:
http://www.ccdc.com/index.cfm/fuseaction/projects.home/category/residential

Then click on the link that says:
Detailed Printable Version of This List

You can scroll down and read about the many projects in progress. I have two reactions. The first was, wholly S#$T there is going to be a lot for sale. The second, is that San Diego is going to be a radically different city. Buying one of these buildings out of bankruptcy for pennies on the dollar, might actually be a good investment.

[San Diego]

How do you buy a condo project out of bankruptcy? By definition, a condo project is owned by several owners. Are you assuming that every owner will go bankrupt at the same time?

Also, 95% of these projects are just pretty pictures in a sales brochure. Very few will get built in the next 3-5 years. The fact that the lenders require at least 40% of the building to be pre-sold with actual “hard money” deposits will prevent most (if not all) of the buildings to break ground anytime soon.

[Anonymous]

Thanks RightSide for the link. I was looking for something like this. I read about the large number of downtown condos under construction or proposed. But, I’ve never seen the numbers broken out.

After taking the arduous task of reviewing each project (I must have too much time on my hands), I counted 6314 units proposed and 3676 under construction. The hotel and rental projects are not included in the numbers.

Of the proposed units, 1831 are scheduled to begin construction during the first half of 2006. Depending on when lenders tighten the noose on builders, I’d say those units have a fair chance of getting built. I would disregard the 3932 units that don’t even have a scheduled groundbreaking.

So, the project list is not as overwhelming as it first appears. Still, I do see enough units coming online to cause headaches for downtown folks.

[Author]

Posts