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.