Mid 2009 Downtown San Diego Market Update

It’s mid July 2009 and time to take a look at the first half of 2009 in regards to the downtown real estate market.  Of all the market updates that I have done including, Rancho Santa Fe | Coronodo | Point Loma | La Jolla, the downtown market is perhaps the most complex.  While most markets consider location, downtown is location, floor height, view orientation, district, and litigation issues.  See understanding the downtown market for some background.

Since many of the sales in downtown San Diego were new sales which may not appear in Sandicor MLS, other data sources have to be looked at to give us a complete picture of the market.

As always, I provide these market snapshots without spin - see market predictions for 2009.  None of us really know where markets are going without some consistent market data pointing to a firm trend.  I would suggest a strong cup of coffee as this report is chock full of numbers and charts.  I would be happy to speak to you on an individual basis regarding some of my personal opinions of the downtown San Diego market and where your best investment may be.

I will provide individual market reports on several major buildings downtown on a separate report since most of that data will come from public, not MLS sources.

The big picture for downtown is that our price per square foot average is far below what a developer would need to sell and make a profit.  Most major projects that were not in the ground have either pulled out of San Diego, or waiting for better times to re-enter the market.

Buildings, like Bosa Developments Electra, closed out with some bargain prices, while Sapphire Tower has adjusted pricing for the market, and Vantage Point is going back to square one.  Bosa Development has also just started closing units in Bayside, which is by far the highest end building downtown, after negotiating with their current buyers.

If you follow my weekly downtown closings you will have noticed that most units priced under $500,000 are selling very close to or above asking price.  Units that are priced over $500,000 tend to be a smaller portion of the market and are usually discounted from the asking price.

You can see by the chart above that the most significant rise and fall in the last year of price per square foot is the first (upper) quartile.  The lowest priced quartile has been trending downward, with the 2nd and 3rd quartile a bit steadier.

Let’s get started with looking at active market data.  You can always visit my downtown market data page updated weekly for the latest market statistics – the charts below are static and not updated for the purpose of this report.

Again using active listings, let’s take a look at this year and last year statistics by average price, inventory, average days on the market, and active market index.

The Market Action Index (MAI) illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory. An MAI value greater than 30 typically indicates a “Seller’s Market” (a.k.a. “Hot Market”) because demand is high enough to quickly absorb available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a “Buyer’s Market” (a.k.a. “Cold Market”) where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall. Keep in mind that an MAI value close to “30″ probably means that the local market is balanced or neutral. So if the MAI for your local market is somewhere between 27-33, then it’s likely to be either a buyer’s market or seller’s market based on the individual street or home area that a particular property is in.

If you want to search active listings for sale in 92101 please visit my downtown search page.

Now lets take a look at the sold attached homes in Downtown San Diego (92101) for year to date.  The range would be from January 1, 2009 through June 30th, 2009.

• 357 Attached Homes Sold
• Average price sold $501,287
• Lowest Price Sold $125,000
• Highest Price Sold $6,160,000
• Average List to Sold Price 96%
• Average Price Per Square Foot $414.38

Looking back to 2008 from January 1st through December 31st:

• 681 Attached Homes Sold
• Average Sold Price $553,318
• Lowest price sold $139,900
• Highest price sold $2,975,000
• Average list price to sales price 96%
• Average price per square foot $462.67

In 2007, which is the top of the market, the following:

• 614 attached homes sold
• Average Sales Price $613,926
• Lowest price sold $190,000
• Highest price sold $7,250,000
• Average list price to sold price 96%
• Average price per square foot $529.80

Looking at pre-foreclosures, auction sales, and bank owned Foreclosure Radar reports a total of 405 attached units in 92101.  These are some significant numbers for the 92101 market.  See check foreclosure activity before you buy.

There are a total of 226 in pre-foreclosure – the owners of these properties have the option of saving their property from foreclosure by selling, doing a short sale, loan modification, or just making up the late payments and penalties.

There are another 117 properties scheduled for auction.

A total of 62 show as Bank Owned (REO).

Foreclosure data is somewhat a sensitive thing with many people going after folks in unfortunate circumtances.  While I have done further analysis of which buildings seem to be affected the most I don’t know that level of detail is appropriate for a public forum.  Suffice it to say that this is a significant amount of foreclosure possiblity, and will continue to have impact on the downtown real estate market.  Please e-mail or call me should you wish to discuss in more detail.

If you want to search for yourself please visit my Foreclosure Radar page.

When I did a search with Diverse Solutions (You can search for Short Sale or Bank Owned) there were a total of 57 today in the Sandicor Multiple Listing System (MLS).  I have provided a link below which is dynamic and updated as the listing numbers change.

Link to attached units that are short sale or bank owned.

For those that are still awake that’s is my best attempt at summarizing the downtown market.  Look for mini updates on individual buildings in the next few weeks.

Now for the legal stuff. Not all sales are reported to Sandicor MLS and while I have tried to be as accurate as possible this information is not guaranteed.

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