As 2008 is winding down I thought I would spend some time looking at where the market is today, and perhaps what we can expect from 2009. The downtown San Diego real estate market is very complex and quite a bit different from other real estate markets both in San Diego and also in the United States.
Today I want to take some time and explain the downtown market from an overview. In the next several weeks I will post more specific articles that relate to the market conditions, but this is a good place to start for general information. A really excellent source of downtown information can also be found at the Centre City Development Corporation (CCDC).
Downtown is comprised of eight districts which include Little Italy, Columbia, Marina, Cortez Hill,Gaslamp, and East Village. Each of these areas offer different options and lifestyles, one of them may be perfect for you.
Much of the data discussed today is from MarketPointe Realty Advisors. I was fortunate to attend a presentation by Russell T. Valone II, who is the CEO and President of MarketPointe. The data for his presentation was through September 2008.
Downtown San Diego has 21,981 residential units. Total condos amount to 11,348 or 52%, total rentals are 3,578 or 8%, and subsidized and SRO’s (Senior/Assisted Apartment) are 7,055 or 32%.
There are 22 actively selling projects in downtown with 3,595 units. Total sold is 2,046 with 227 sold in 2008 leaving 1,549 available. There were 47 projects that have sold out with a total of 6,441 units for a total of 69 total projects or 10,036 units. 54% of downtown’s inventory is complete.
Back in 1997 there were a total of 97 new home sales in downtown. The market increased steadily up to a high of 2,057 units in 2004 and has dropped each year, 1,004 in 2005, 1,103 in 2006, 386 in 2007, and 228 up to September of 2008. Resale was 102 in 1999, with a high of 722 in 2005, and 400 in 2008. The resale market for 2006, 2007, and 2008 were very similar.
One of the interesting aspects of downtown real estate is floor range. The higher you are in a building the higher the price. The average price for a unit in the 21+ floor range is $1,224,011 with an average of 1,449 square feet or $844.95 per square foot.
From a floor range of 16 to 20 stories the average price was $779,661 with an average of 1,089 square feet or $715.97 per square foot.
Floor ranges from 11 to 15 stories had an average price of $699,468 with an average of 1,143 square feet or $612.09 per square foot.
Floor ranges from 06 to 10 had an average price $548,389 with an average square foot of 1,030 or $532.51 per square foot.
Floor ranges from 0 to 5 had an average price of $463,057 with an average square foot of 926 or $500.80 per square foot.
Another important consideration when purchasing is orientation of the unit and view. As mentioned before the market is very complex and is changing constantly. New projects in the future may block or change your view. Work with an experienced agent to help you determine what is in the future, both proposed and planned.
A few buildings in downtown have fairly protected views, others may have great views today but that will change as development continues – that is just part of living in an urban environment. Other considerations are building amenities, cost of HOA, lawsuits in the building, threat of lawsuit, percentage of short sale or bank owned, and as always – LOCATION, LOCATION, and LOCATION!
When working with Clients I try to learn as much about them as possible. A fan of baseball may consider East Village, and a Client commuting to North County may consider being near the Coaster.
Right now is an excellent time to invest in real estate if you are careful in your selection. Anyone considering purchasing needs to do their homework and look at all available options before making a purchase. Those that do this will benefit greatly over the years from purchasing at or near the bottom of a market shift.
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