The San Diego Business Journal reports on a new $200,000 advertising campaign by the Downtown Residential Marketing Alliance aimed at encouraging more people to move downtown.
The Downtown Residential Marketing Alliance is made up of CCDC and several private developers.
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Good luck with the commercials. . .unless they want to help people sell that stucco McMansion in Temecula!. . .now that there are 23,500 homes on the market in SD county. . .the money would be better spent in London, telling people they can buy a nice condo for 600K USA dollars. . .that is about 300 British Pounds (chump change for them). Actually, now that the Canadian dollar is nearing parity with USA, Bosa could start selling SD condos to people from Vancouver.
I saw one of these commercials the other day. Not too bad, but it won't do a bit of good until the developers start cutting their prices to realistic levels.
I live downtown and like it a lot. I agree though that this is a dollars and cents issue that needs to be resolved by price reductions (or increased salaries).
I do see this as another dead canary that indicates a price correction as the developers aren't saying there is an outright problem they didn't have to market the current buildings much at all not to mention the lifestyle of downtown.
Hi ronw,
You might consider renting, the neighborhoods down here all have a different feel. It's probably worth the "investment" of a year renting to see what you like.
I plan on living downtown eventually as well. I sold my condo in Carlsbad two years ago and now rent in UTC. Fortunately affordability isn't an issue for me; I just refuse to make any major purchase if the value doesn't make sense. And while downtown condo prices are coming down slowly, they've got a long way to go. The vast majority of the nicer 2Bed/2Bath downtown condos rent for $2,000 to $2,500 per month. That means that their intrinsic value is somewhere in the $325K to $425K range, and I'm being very generous with this estimate. The problem is these units are currently on the market for $500K to $750K, even after the first round of reductions. And I and apparently the majority of the buying public aren't buying. The prices must and will come down. But it's gonna take some time because most sellers are clueless as to what their condos are "really" worth and they'll live in delusion for as long as they can until something forces their hand. I'm guessing I'll end up buying again in three years, but that's just a guess.
Hi David,
I think the rent versus monthly payment ratio is a key factor in determining a buyers market. While I also see rents firming a bit I think that prices will decline a lot more than rents will go up.
I agree it'll take awhile before the gap closes. 2007 will be very interesting to watch unfold.
A lot of us seem to be in the same boat. . .we sold our place in Northern California, and are renting at LaVita. I had owned rental properties since the mid 1980's, and bought when prices were about 3.5 times rent. I used to joke that I couldn't afford my own place in Walnut Creek by 2005! Either prices will need to come down, incomes up, or a combination, but I think it will be a long slow process - especially if we wait for incomes to go up. We are planning to buy sometime in 2007.
Hi Mark,
I think it's a very telling fact that many people would not be able to afford their place if they had to pay what it's worth. Affordability is such a huge drag on the marketplace since many people simply can't afford to buy. There are also many people like yourself that have the means but are on the sidelines waiting for a sensible environment.
How do you like La Vita?
La Vita is pretty well built, and in a great location. No problems with water pressure, etc. (I understand Treo had some water problems). The bedrooms are quite small, but I haven't seen all the units. I am in the "mid-rise" building on Union, so we get great elevator service with only 7 floors and two elevators. HOA's are pretty low - I believe our landlord said $340 a month. Service seems very good, they clean all the time.
How long do you have to wait for prices to come down. I have seen stats that show the condos priced over $750K to $1 million, and $1 million to $1.25 million actually increased slightly (less than 2%) for the first six months of 2008 vs last years prices (per square foot). Anyone know why the high end is doing so well? I mean sure lets watch prices drop, but its the condos built for investors (ie bought before you know the quality and that there is really no view) that are dropping in price (entry level condos). I dont want to live in one of those so what am I to do?
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