When evaluating the downtown San Diego housing market, you may notice most of your options are condominiums, penthouses, and lofts. Moreover, you’ll likely see many of the listings you come across are either brand-new or just a few years old. Older condos do come on the market from time to time, and they’re often priced to sell. The price factor alone is enticing for many prospective buyers, but seasoned investors will look at other criteria as well. Under some circumstances, buying an old condo may have some advantages, but this is generally the exception rather than the rule. If you’re comparing condos, downtown San Diego offers a wide variety of choices, so keep the following information in mind as you compare older units with newer ones.
The Condo Market Operates Differently
In some American housing markets, condos tend to be more expensive than single-family residences. This is the case in Miami Beach but not in San Diego, where an old three-bedroom California ranch-style home can cost considerably more than a new condo in one of the downtown districts. The fixer-upper aspect of condos is also different because in most cases, buyers are only allowed to make interior renovations. However, there are some exceptions.
Old Condos Are Less Marketable to Investors
It’s not unusual for new condos to be without tenants for months. This happens when the market is very active, and investors treat new units like commodities. There are always buyers who go for the most recently completed condos, and they’re often ready to pay prices above what the market suggests. If your intention is to move into a condo that will yield equity in less than a year, old units won’t provide this advantage unless the market heats up to the point of being irrational.
Consider the Condo’s Renovation Potential
While you’ll be able to remodel an old condo as soon as the closing transaction wraps up, your options for improving the exterior and common areas will be extremely limited. First of all, you’ll have to convince the condo board to approve your idea, and then you’ll have to figure out the funding sources. One option would be to join the board and use your own funds to pay for the project. Alternatively, you could loan cash to the homeowners association.
A Historic Condo May Be a Good Investment
If the building you’re evaluating has some historic value, acquiring an old unit could be worth the risk, but waiting for its value to rise will require patience, and even then, the purchase may be risky. An appraiser who is familiar with historic properties may be able to give you an idea of your chances of buying a condo that may one day be listed in the National Register of Historic Places. If your condo is ultimately designated a place of historical significance, the city and nonprofit organizations may become interested in financing restoration projects.
If you’re considering buying an older condo or any type of San Diego real estate, downtown is definitely the place to look. For outstanding advice on the housing market in America’s Finest City, call on the professionals at 92101 Urban Living, the experts on every aspect of buying and selling real estate in downtown San Diego. Give us a call today at 619-649-0368.