Inventory is down, inventory is down, inventory is down. I’m sure you’re tired of hearing this, but it’s the truth. According to the San Diego Association of Realtors (SDAR), the number of active listings (countywide) has been halved (since 12 months ago) and pending sales has been steadily rising since the beginning of the year. With very little new construction, resale numbers are on the rise and distressed sales (REOs and short sales) are declining.
Looking at 2012 YTD downtown San Diego sales, there have been 468 sales on the MLS with an average market time of 74 days. In the same time last year, there were 575 sales with an average of 97 days on the market. That’s an 18.6% decline in sales and a 23.7% shorter market time. Since about March, I’ve personally seen much higher buyer confidence and less quality inventory (read: we’ve passed the bottom and multiple offers are very common). I don’t think we’ll see any drastic changes in home prices, but I don’t think you’re going to be seeing any incredible deals anymore.
Comparing the first half of 2012 versus 2011, there as been a 40% increase in resales and 30% decrease in short sales (for downtown San Diego). Also, the number of foreclosures (REOs) has declined by 52%! If that doesn’t give you an idea of what’s going on with San Diego real estate, I’m not sure what will.
If you have any questions, thoughts, requests, or complaints, I’d love to hear them. My prediction is that once we start to see all the proposed hotels, office space and retail space actually get built (Lane Field, Navy Broadway Complex, 880 W Broadway, Convention Center expansion), downtown real estate is going to quickly become very expensive. In my opinion, the best places to invest now, are East Village (M2i, The Mark, Parkloft and The Legend) and the Columbia District (The Grande, Bayside, Sapphire Tower and some units at Electra – although I’d probably wait until the Santa Fe Depot Parcel 9 building starts construction to see lower prices at Electra).
Reasons – there’s a ton of development that’s going to eventually happen to the Colombia District and in my opinion, the existing condos are generally undervalued. Once the parks, public spaces, shops, etc get built, I think the Broadway – Ash St area will be pretty incredible. As for the East Village, that’s an even easier prediction – it’s the only direction that downtown San Diego can actually expand towards. The north is blocked by the 5 FWY and existing homes (that aren’t scary/rundown), there’s water to the west and the south…so that leaves the east. Currently, Park Blvd provides a clear boundary for where downtown has been redeveloped and has not
(just take a “stroll” up Park and see for yourself).
But what about the Marina District?! The Marina District will always be highly desirable, but since there’s only one lot left to develop (which Bosa Development owns), there’s not a whole lot of room for improvement. I think it will still always be very expensive and in high demand, but from an appreciation perspective, I think the Colombia District and East Village will appreciate at a higher rate in the near future (I’m not saying they’ll be more expensive though).
Anyhow, that’s all just what I think. If you have any questions, please let me know. If you want to get an idea of what your home is worth, just ask. Thanks.
Denny Oh 858-243-2092 [email protected]