6 Reasons Why Downtown San Diego isn’t Over Built

September 26th, 2007 categories: Buying, Columbia District, Core District, Cortez Hill, East Village, Gaslamp District, Little Italy, Marina District, Real Estate News

The market is bad, homes are over priced, inventory is too high and interest rates are terrible….sound familiar? Well is that really the case? Having been in the business for three years, I’ll admit, this is still somewhat new to me. It’s true, I’m not as experienced, or as old, as some of my colleagues. However, I have been in the business long enough to know that bad news sells better than good news and that older isn’t always better.

Here are a few highlights on an article that Alan Nevin wrote in the September issue of the San Diego Metropolitan magazine.

1) July of 2007 had 492 active resale listings Downtown – July of 2006 had 613. That’s almost a 20% reduction in active listings.

2) In early 2006, there were about 100 condos for sale at The Grande at Santa Fe – today there are only 38 for sale(out of 440).

Of the homes currently for sale the average size is 1,521 square feet and the average asking price is $1,134,886 – $731/square foot.

3) The average waterfront condo in Downtown San Diego is priced around $750/square foot, but is closer to $1,000/square foot in other West Coast cities like Seattle, Vancouver and San Francisco.

4) Fortune magazine recently stated that Downtown San Diego will be flooded by 6,000 newly constructed condos….but here’s what they neglected to discuss… Bosa_pacific_hwyAsh

Of those 6,000 condos, approximately one third of them will be completed by the end of this year. In addition, only 700 are still for sale.
2008 is scheduled to deliver three more buildings(but my guess is 2009) – Bayside, Breeza and Sapphire Tower
- The view units in these buildings will be priced around $850/square foot.
Only Vantage Point is scheduled to be completed in 2009, bringing 677 units with it.
Of these 3,100 future condos, 1,700 of those are already sold, only leaving 1,400 to be sold over the next year and half.

5) Many of the 2007 high end buildings have already paid off their construction loans.

This means that the developers will not have to cut their prices to to pay off their equity partners (i.e. Lehman Brothers and Capstone).

6) Currently there are approximately 30,000 Downtown residents. By the year 2030, this number is predicted to be closer to 90,000.

Sapphire tower Is all of this new to you? Does it seem to contradict what the Union Tribune says? There is no bubble and in my opinion, Downtown is not over built. Yes there’s a lot of inventory coming onto the market, but it’s spread out over time. In addition to this, there are very few high quality products coming on.

Once San Diego gets its corporate side going, which it slowly is, Downtown San Diego will be one of the nicest, most sought after metropolitans in the nation. We’re young, but we’re going to be great and you should take advantage of it while you can afford to.

In my opinion, buyers will have the best deals from now, through 2008. If you have any questions, or comments, I’d love to hear them. And if you need someone who knows and works the Downtown market, I’d love to get in touch with you.

To get a FREE list of some great deals, call me at 858-243-2092, or email me.

Other Must Reads:

San Diego Is A) Over Priced B) Over Built C) In a Bubble D) The Most Under Valued Metropolitan…?

Has San Diego’s Real Estate Market Hit The Bottom?

2006 vs 2007 Downtown San Diego Condo Sales Statistics