Monday, December 31, 2007

San Diego story

This story is third-hand but I believe reliable, and shows what can happen in a downturn. San Diego now, Los Angeles in 2008?

The subject is a small ~1,000 SF high-ceiling loft condo in a new high-rise building a couple of blocks from the baseball stadium in downtown San Diego. (Photo is for general location only; I doubt it shows this building.)

It originally expected to be priced at $800K, but with the San Diego downturn was asking $550K. The buyer in this story offered a rediculous low-ball $400K - half its target price. The sales person came back with an "ok", and he bought it. But even at that price, after adding a large HOA fee and property taxes, it would not rent at positive cash flow.

Closer to home, today's LA Times featured three housing bubble articles: front page lead "Housing crisis takes bite out of states, cities"; "How a bank fell victim to loan fraud"; and "Seattle clings to housing peak, but some wonder if it can last". And yesterday's Times Real Estate featured Nicholas Cage who took his Bel-Air mansion off the market, no buyers at $35M.

Coming tonight/tomorrow: year-end inventory wrapup, and a look ahead to 2008.

3 comments:

Kate said...

$400/sq.ft. is still an awful lot for a high-rise condo in San Diego where the wages are lower, gas prices are higher and the HOAs are laugh-out-loud funny. In these downtown highrises, they charge a premium to lay carpet. Seriously. They tell you it's because they have to bring all their equipment up the elevator.

Anonymous said...

Can you comment on the 4 plus bedroom homes now on the market in the 90402 walk streets - go through each of them and comment on how much we as a group think they will sell for

think about which are overpriced and which are not

Westside Bubble said...

Actually, no, Anon, partly because I don't know their interior amenities, not having been in most of them.

You can see a list of current inventory in "Not selling north of Montana" (except 1605 San Vicente and 333 14th, off the market).

You can find recent sales prices at the Assessor's website. I plan to post an update on sales prices of houses featured here.

But that's 2007, and prices may well fall in 2008.

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Thanks for the added info, Kate!