Has The San Diego Condo Market Turned the Corner? – Developers Raising Prices!

Yes, you read the headlines correctly; some developers are actually raising the prices on the purchase price of their brand new condos in downtown San Diego . If you have been reading any of the main stream press lately you know sales volume is way up from last year. Downtown sales volume is up roughly double from last year. Prices in general have been coming down since last year, but there are highly desirable locations within downtown where demand is outpacing supply. How can developers be raising prices in this market. Easy, some developers are selling their units faster than they think they should be selling so they think the prices must be too low. I don’t want to mention the name of the developer(s) in this article as its probably press they don’t want. Supply of new condos has hit a brick wall and no new condos will be built and completed in downtown for another four years.

Yes, there are a few new condo buildings in downtown under construction and all of them are roughly 75% complete. When I say no new condos, I’m talking about no one breaking ground for at least another two years, for many reasons, mainly lack of available development financing. So a developer may get a loan in two years if the banking situation improves, then another two years for construction. You can see the forecast, its not hard, price pressure is on the way up since we have run out of new supply for several more years. .

In discussing this with other Realtors, some have made an excellent point and that is to take your clients to buy in these building, because every buyer wants to buy in that a building that is actually going up in price.