Downtown San Diego Condo Inventory Supply to be Cut in Half in
2006.
The condo market in downtown San Diego has seen its volume of
available resale units climb from 50 to 580 from spring 2004 to
the fall of 2005. The main reason for this was the completion of
new condominium buildings. Recent experience shows that when a
new building is completed about 20 to 25% of the units will come
up for resale (from investors).
In 2005 (as of Nov 27th) there were 356 new condos (built in
2005) that came on the market. In 2006, no new condo buildings
expected to complete construction with the exception of the
second phase of Gaslamp CitySquare which is running behind its
2005 completed schedule date. This means that at the absorption
rate we are experiencing in the downtown condo market our
available inventory should drop to about 200 units by the end of
2006. This will lead to firmer price stabilization in early 2006
and price increases in late 2006. Two other facts support this,
one: a lot of new builders are not allowing investors (those
that want to flip the unit) to purchase from them, secondly,
most of the new construction to be completed in 2007 will not be
move-up properties but rather targeted to an audience not yet
downtown. I say this because of the quality and location of many
new projects slated to hit the market in 2007.
Condo shoppers knowing this would be wise to purchase a condo
before spring as the inventory is already off its peak (now 539
units, down from 580) and this trend will continue over 2006.
Meaning as time goes on, less to choose from and more demand
from the remaining units (higher prices).
The above information has been provided by downtown resident and
Realtor Mark Mills with RE/MAX Real Estate Consultants. Visit
him at http://www.LiveAtTheTop.com Where you will find downtown
condos ratings and reviews.