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Likelihood of Condo Conversions Downtown this Year

By Mike in Downtown San Diego Real Estate|Downtown San Diego Real Estate Market Analysis|March 2014 with 0 Comments

Likelihood of condo conversions in Downtown

These days there is a surge of San Diego apartment construction underway.   With no fewer than a dozen projects either planned or under construction, there are a staggering 2737 rental units scheduled for development in Downtown San Diego over the next 2 and a half years.   Currently, if you drive around the East Village you will see many Downtown San Diego condos under construction.  In the East Village alone one can count at least 6 new Rental projects.  They range in construction and size.   For example Urbana…a combination of cement base and wood construction…located on 10th Ave in between Island and J Street will add just under 100 units.  Also currently under construction is the cement constructed luxury Pinnacle Development towers that will eventually total 955 units located at 15th and Island. This will eventually add two highrise towers to the Downtown San Diego skyline.

The construction of these new rental units in the East Village and other neighborhoods in Downtown San Diego is a positive development.   The addition of these new rentals will add more full time residents to the neighborhood and promote the growth of retail infrastructure.   With inventory levels of Downtown San Diego condos for sale so low, and no new “for sale” inventory to hit the market until 2106 or 2017…the big question is the likelihood of condo conversions Downtown for the near future?   In a recent Union Tribune article entitled “Will Condo conversions rise in 2104“, the question is answered by local experts.   Out of the six experts interviewed…it looks as if the decision is split.  All agree that inventory levels are low and that condo conversions downtown will eventually happen…they just can’t exactly agree on the timing.   Low vacancies and rent increases of 4% or higher may keep rental units exactly where they are…currently generating revenue for the ownership.   However…as long as inventory levels stay low and the market continues to experience lower interest rates in an improving housing market…we will continue to raise the question of condo conversion.   Either way…it appears as if it is not a question of if we will see an increase in condo conversion downtown…it is only a question of when. ')}