The original mission of proving the market was moving down via posting about the price action of specific properties has been met. I still intend to blog from time to time about specific properties or other items of interest so check back.
It's New Years Eve and there is very little time to update the blog with analysis of last year's predictions before we uncork 2008. Stay tuned for another post on predictions for next year.
1.) San Diego property will continue to decline in value with condos continuing to lead the movement down. This decrease will range from 5-25%.I think it's very safe to say that this value range decrease came to pass for all but a very small portion of unique properties.
2.) Downtown condos will depreciate another 10-25% in another slow and orderly decline similar to how 2006 played out. Quality will be key in terms of holding value.Again, this also came to pass. Quality condos did fair better than the marginal condos, apartment conversions in particular.
3.) At least one more downtown condo project will go rental before completion. As noted on this blog the former Broadway Lofts condominiums has reverted to a rental project. A potential candidate for going the rental route is Solara Lofts which is an office building conversion project that should be finished by early summer, since sales haven't started yet it may be prudent for them to pull the development off of the market until prices stabilize.While Solara Lofts did not convert to rentals, the SmartCorner project is advertising new condos as rentals on Craigslist.
4.) The massive number of new urban condos coming will continue to impact price declines in the attached sector of the market, however since many of the developers will decide to carry inventory for 3-6 months after project completion and since the natural tendency for construction projects to take longer than scheduled the inventory increase and price declines continue into 2008.There are many unsold new developer units on that are not listed for sale as well as new units at Aria and Electra coming onto the market, this prediction while hard to quantify is arguably taking place and as predicted will persist into 2008.
My closing comments for last year:
In summary the decline trend continues for 2007 with a bottom in the market pushed out past the coming year. A significant wildcard are interest rates which could drive a quicker decline if the one two punch of materially higher rates combined with adjustable mortgage resets combines to drive more foreclosure and short sale activityWhile interest rates didn't go up much the major credit market problems related to the housing correction did in fact drive short sale and foreclosure activity in 2007 which clearly added to the price declines experienced in 2007.
All in all it's been a very interesting year in San Diego real estate