2009 was an interesting year, especially in real estate. In San Diego, like most places, home prices were down typically 20“50% lower than they were a few years before. In the downtown San Diego real estate market, we more or less, saw what we expected it to do…condo prices continued to fall as more short sales and REOs hit the market and the market continued to be a hot topic of conversation.
In 2009, there were 808 condo sales in downtown San Diego “ almost 19% more than the amount sold in 2008. In my opinion this was due to two factors: A) Prices were lower than the year before and B) People were more confident that the bottom had been reach, or at least it was close. As you can see in the chart below, month-to-month, 2009s condo prices were on average, 17% below 2008s sales prices(and yes, I know you cant take an average of an average, but you get the idea).
At the peak of the market in 2005, there were 846 condo sales in 92101. The average sales price then was $686,991 versus 2009s $462,710 “ almost 33% below 2005s average downtown San Diego sales price. However, due to the low prices, there were 808 condos sold in 2009, which was almost 19% more sales than in 2008. The entry level market for downtown San Diego was extremely competitive. Anything below about $300K was going quickly, while the $1.5M plus range was still pretty quiet. Still, buyers at all price points were looking for deals and may had the cash to do it. Once again, the summer months were the busiest with 97 sales in the month of July. Surprisingly, we saw 97 more condos sold in the month of October “ perhaps driven by peoples desire to get into something before the holidays.
With most downtown San Diego condos selling in about two months, even with all the short sales and foreclosures, 2009 turned out to be a pretty decent year “ unless you were selling. Many people discovered that they could actually afford downtown living since prices and interest rates were low – something that to my knowledge hasnt ever happened in San Diego. Downtown San Diego even saw a condo sell for $6,160,000! Now if this person spent that much money on a condo in downtown San Diego, maybe people should reconsider whether or not buying real estate in San Diego right now is a bad idea “ Im guessing this person might know a little bit about investing.
No one knows exactly what will happen to the real estate market this year, or the next, but what we do know is that interest rates must go up. And when they do, I hope you can be happy you already bought and not complaining that the $500K home you could have afforded is now actually a $425K home (based on 20% down and a rate increase from 5.25% to 6.75%). So with that said, good luck! If you would like to talk about purchasing a home in the San Diego area, please contact Denny Oh at 858“243“2092 or [email protected]. And if you are thinking about selling, it might be better to do it now and take advantage of the buy side than waiting.
*All statistics are based on Sandicors MLS. Many of the new construction statistics are not listed in the MLS, therefore not in these numbers.