Title: Q1 2008 Buying Trends nosing up in Downtown San Diego
A little more than a week ago, I was walking down 10th Ave behind an overconfident baseball fan of the visiting team at Petco Park. They pointed to a FOR SALE sign and commented on how San Diego was a distressed and struggling real estate market. These sellers would probably take ANY offer, one of them said. Im going to wait until the end of the year when people are really desperate. No one is buying anything here right now.
This might be the best example of deductive reasoning I have seen in a long time. While many areas of the nation are facing the housing crisis that CNN and the Today Show readily report on, it doesnt necessarily mean that all areas of the nation are in crisis.
Buyers are out there in the downtown 92101 area.and they are buying! The Q1 2008 sales data found in the paragraphs below supports this notion and suggests that there are not as many fence-sitters timing the market as the occasional downtown visitor may think.
92101 SALES DATA FOR Q1 2008
On Thursday April 10th, 2008, Market Pointe Realty Advisors President and CEO Russ Valone presented a very well organized compilation of 92101 sales, inventory and pricing data to a large group of downtown realtors at the weekly caravan. In his 14-page PowerPoint presentation, Russ indicated that the number of condo re-sales in 92101 alone (excluding new condo sales) rose to a total of 38 condos during the month of March 2008. Thats up 23% from Februarys 31 re-sales and 12% to 15% up from December and Januarys numbers of 34 and 33 re-sales respectively.
BUT.Arent those early winter months the slowest of the year by comparison?
Not so according to a statistical analysis of re-sales in 92101 from January 2007 through March 2008. Of the 572 re-sales sold during this timeframe, the 15-month 92101 average re-sale activity is 38.13 homes per month!
Even the infamous days-on-market average for downtown 92101 is on its way down from an eight-year quarterly high of 92 days to just 71 days in Q1 2008!
BUT.What about those new condo sales, you ask?
The inventory of new condos that are still for sale is diminishing at a far greater pace than that which was predicted two years ago. New condo sales (i.e. the sales in which new condo owners actually closed escrow) were up in March 2008 to their highest point of 34 since June 2007! This kind of sales activity defies the most recent 15-month average of 29.53 new condo sales closed per month. I guess not as many buyers have backed out of their advance condo purchase as some may have speculated.
BUT.Cant statistical sales averages be manipulated to say just about anything?
The numbers dont lie in favor of these arguments. The 15-month average of 29.53 new condo sales per month was weighted by months like February 2007 when a whopping 82 new condo sales closed escrow during the opening of the 327-unit ICON community and the 179-unit Alta community. In todays market, where far fewer new condos will be closing sales in 2008, 34 new condo sales closing escrow in March 2008 is simply rockin!
BUT. What about those suffering prices per square foot? Isnt that indicative of a struggling market?
Check out Chads blog, Pricing Trends in Downtown San Diego, for more information on how the price per square foot has been positively affected.
BUT. What about all of those short sales and bank owned properties commonly referred to as REOs?
Check out Mikes blog, Myth 2: re. Flood of inventory into the downtown market, for more information on 92101s distressed sales market.
So no one is buying downtown and both sellers and developers are desperate out there?
Whats your theory? Is there still time in 2008 for buyers to time the market? Has the big plunge in pricing or the proverbial bottom that some seem to be waiting for already happened? Everyone has their theory- some are statistical, some use deductive reasoning, and others just have a hunch.