The Grande at Santa Fe Place. One of Bosas biggest hits, the North and South Grande towers had a total of 19 sales in the second half of 2008. With a total of 442 condos between the two towers(including the ground floor townhouses), were only talking about a 4.3% turnover rate. I dont know who came up with the idea that theres a ton of inventory out there, but clearly with so few sales, this cant be the case.
Of the 19 sales, from July-December of 2008, 8 were distressed sales “ either short sales, or bank owned homes. Of these short sales and foreclosures, many had a sales price equal to what the banks were asking. In fact, the average sales price was only 2% below the list price. Compare this to the regular 11 other sales that had an average sales price of 6% below asking and its clear that short sales and REOs were better priced condos. And aside from one ridiculous sale, none of the regular sales sold at full price.
What does this mean? Well, with 8 out of 19, or 42%, sales being distressed sales, clearly it shows that even some of the best addresses are being affected by the market. Actually, it really isnt the markets fault, rather than the homeowners who over extended themselves. I imagine it was a case of people getting too greedy, too hopeful and too careless. People leveraged their homes way too much and had to pay the price. Yes, clearly the lending industry needed to have been more regulated, but I still think the majority of the blame falls on the homeowner.
Opinions aside, heres a look at the numbers
In the first quarter of 2008, The Grande towers had 15 sales with an average sales price of $884,067. Q2 at The Grande had only 4 sales, averaging $866,702 per sale. With the increase in short sales and foreclosures, The Grande saw a lower average sales price in the second half of 2008, with an average sales price of $769,468.
Ironically, the first and second half of 2008 each had 19 sales between the North and South Grande towers “ 38 sales, for the 442 condos “ less than 8.6% of the entire inventory. This is well with in the 7“10% healthy turnover rate.
Whats to come? with 38 active condos today, 8 condos pending, I think were going to see an upswing in sales. Interest rates are down and prices are low. I think prices will continue to slip over the next 18“24 months until the finally stabilize. I dont think well see any major reductions, but the prices are at the mercy of the short sales and REOs. Until all of that inventory is absorbed, prices must come down.
So what should you do? If youre thinking about selling, I suggest you do it now. I can promise you prices will not be going up anytime soon and while you probably wont make a profit on your home, you will get more today than you will 6 months from now. I think the key for sellers is to sell now so they have liquidity and be ready to jump on the next deal that comes around.
If youre a buyer, it depends. If youre a cash buyer, you can afford to wait. Interest rates dont affect you, so you can wait for a great deal to come by and take advantage of your cash. Banks love cash buyers and theyll almost always beat out a loan. If youre a buyer who needs a loan, Id suggest you start looking now. While prices will probably continue to decline, slightly, the interest rates probably wont “ and any gains you might see on the lower prices will be negated by the increase in rates.
Additionally, buyers who wait will face more competition. As prices level out, more and more buyers will come into the market. The key is not so much, timing the bottom, but finding the right home under the best possible conditions. If you know anyone whos been actively trying to buy a home, ask them how many properties theyve lost to other buyers. Youll be surprised
For more information on the Grande, or other homes in San Diego, please contact Denny Oh at 858“243“2092 or [email protected]
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