Business & Finance Renting & Real Estate

Downtown San Diego Condo Inventory At Its Highest Level Ever

Downtown San Diego condo inventory at its highest level ever.
As of December 2007, there are 900 new and resale condos available, up from about 700 units two years ago.
The main reason for the increase is the number of unsold units in newly completed buildings, accounting for almost 400 of the 900 downtown condos.
The volume of downtown San Diego resale inventory has been consistent over the past two years at about 500 units.
In 2008, we will see the completion of three new condo buildings (Aria, Breeza and Sapphire tower) and in 2009 only two new buildings (Bayside and Vantage Pointe) will be completed.
Inventory levels in the highly rated and most expensive buildings downtown averages about 7% while the lower rated and lower priced buildings current inventory levels are averaging about 10%.
The higher inventory levels in the lower priced buildings is driven by financing, rising ARMs leading to foreclosures and the difficulty first time buyers are having getting mortgages at those price points.
Dividing the available inventory into price ranges shows 300 units under $500K, 400 between $500K and a $1.
0M and 200 units priced over $1.
0M.
Comparing these numbers to this year's sales volume concludes it will take nine months to sell the inventory priced under $500K, ten months for the $500K to $1.
0M inventory and eleven months for the inventory priced over $1.
0M to sell.
A very interesting point to make is that on the high end ($1.
0M+)the resale inventory is only about one third of the total inventory of high end units.
This is due to new construction and with the number of new condos being built dropping dramatically, the condo buyer has not and will not have this many units to choose from ever again.
Sure there will be more real estate boom cycles, but the prime land in downtown San Diego is already built upon.
If you want to know where prices for these high end condos is heading, think back to Economics 101, supply (virtually coming to and end) and demand.
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