Downtown Condo at Park View #216

This small two bedroom is located in one of downtown's older buildings on Cortez Hill. Since it's rental value is probably no more than $1,200 a month you would really wonder why someone would pay twice that amount to own a marginal unit like this one.

Type: Listed on MLS(#068075764)

Resale Price: $380,000 (Range priced $360,000 to $400,000)
Cost: $405,000

Loss@6% Sales Expenses: $47,800
Loss%: 11.80%

Purchase Date: 10/01/2004
Holding Period: 23 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 919

Purchase Details: view

"Everybody wants to live in San Diego" Downtown Condo at Acqua Vista #959

This is a very interesting property as I believe this is the Acqua Vista unit discussed in this Union Tribune article from April of 2005.

This is more evidence of speculators taking losses on downtown properties. How many of the thousands of condos to be delivered downtown are under contract with speculators? Keep in mind that the buildings that are underway all started sales during a very pro-downtown "can't lose" environment.

Additionally interesting is that the Park Boulevard West unit discussed in this article generated approximately $75,000 in profit. The simplified loss on this unit is $46,060 however I doubt it sells for this price and as noted in the UT article it was a negative cash flow rental. County records show property tax of $5,986. Since this unit has only one parking spot and it's in a marginal building that was initially developed as a rental project it's unlikely it'll sell at this price point. At this point this investor experience downtown between the two properties is breakeven at best.

Type:Listed on MLS(#066037976)

Resale Price: $489,000
Cost: $505,720

Loss@6% Sales Expenses: $46,060
Loss%: 9.11%

Purchase Date: 08/02/2004
Holding Period: 25 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 987

Purchase Details: view

Another Downtown Condo at Gaslamp City Square #703

Here's another unit at Gaslamp City Square that's sold for less than it last changed hands for in late 2004.

Type: Closed Sale

Resale Price: $618,000
Cost: $631,881

Loss@6% Sales Expenses: $50,961
Loss%: 8.06%

Resale Date: 05/16/2006
Purchase Date: 12/10/2004
Holding Period: 17 months

Bedrooms: 2
Bathrooms: 2
Square Feet: 1016

Purchase Details: view

Resale Details: view

Machines for Living: Downtown Condo and Office Towers

Fantastic cover story in this week's San Diego Reader features a walk through downtown and details many of downtown's buildings.

I posted this a few days ago on my other blog, since this site gets a lot more traffic and there's a lot of chatter about downtown condos I think you might enjoy this article.

Developer could transfer Imperial Beach project | The San Diego Union-Tribune

Here's another story from today's Union Tribune, very interesting quote from D.R. Horton which is a very active building in San Diego:

"Last month, in a conference call with Wall Street analysts, D.R. Horton reported that San Diego was its weakest market in California. Horton officials said there were too many homes and not enough buyers. "

Developer could transfer Imperial Beach project | The San Diego Union-Tribune:

Survival... Like Déjà Vu, All Over Again

This could easily be called "The more things change, the more they stay the same." Excellent piece from Kelly Bennett of the Voice of San Diego on the real estate boom of 1886-88.

voiceofsandiego.org: Survival... Like Déjà Vu, All Over Again: "The Great Boom' of 1886-88."

Escondido code sweep nets pile of real estate signs; agents irked | The San Diego Union-Tribune

Escondido code sweep nets pile of real estate signs; agents irked

I had to laugh a bit at this story.

Downtown Condo at Gaslamp City Square #604

Gaslamp City Square is in the heart fo the Gaslamp and was completed in late 2004.

The second phase is just being completed and there are many unsold units for sale by the same developer of Cortez Blu and Acqua Vista.

Type: Closed Sale

Resale Price: $470,000
Cost: $478,609

Loss@6% Sales Expenses: $36,809
Loss%: 7.69%

Resale Date: 05/04/2006
Purchase Date: 01/18/2005
Holding Period: 16 months

Bedrooms: 1
Bathrooms: 1
Square Feet: 799

Purchase Details: view

Resale Details: view

Downtown Condo at Palermo Price Cut Below Developer Price - #115

Palermo is located on "Lower Cortez Hill" and is right on the border with Little Italy. Designed and built as rentals it was converted into condominiums at the end of the development of the building. There was even an "Apartments for Rent" sign on the building at one point. This is the third unit featured on this blog.

It's also noteable that this unit has been reduced to below the initial purchase price from the developer.

Price cut history:

Price Reduced: 06/09/06 -- $535,000 to $499,000
Price Reduced: 08/28/06 -- $499,000 to $490,000

Type: Listed on MLS(#066032843)

Resale Price: $490,000
Cost: $494,990

Loss@6% Sales Expenses: $34,390
Loss%: 6.95%

Purchase Date: 05/23/2005
Holding Period: 15 months and counting...

Bedrooms: Loft
Bathrooms: 1
Square Feet: 1096

Purchase Details: view

Legal Problems at El Cortez Condominiums

Dan Bauder with the SD Reader and formerly with the Union Tribune reports on the lawsuits and development and sales practice controversy at the El Cortez condominiums development located in downtown's Cortez Hill neighborhood.

I have personally been in this building and while it's pretty much cornered the market on classic building condominiums downtown the infrastructure of the building is troubled.

San Diegans Start to Feel the Exotic Mortgage Pain

The Voice of San Diego reports on the effect of exotic financing on homeowners in San Diego. Excellent discussion with a borrower about her experience as well as quotes from mortgage industry members.

I do think that Julie Haas, the option rate mortgagee, miscalculated her worst case scenario. I think anyone buying real estate in the last three years should have factored in a 25% market decline into their numbers to see if they would still be happy over the medium to long term.

Look for more "Live Downtown" commercials.

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.

5170 Clairemont Mesa Blvd #2, San Diego 92117

This older Clairemont Mesa condominium is listed on Foreclosure.com as fully foreclosed.

This unit is currently owned by Wells Fargo which presumably was the lender on the property.

Type: Listed on MLS(#061055067)

Resale Price: $299,000
Cost: $365,000

Loss@6% Sales Expenses: $83,940
Loss%: 23.00%

Purchase Date: 04/19/2005
Holding Period: 16 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 1058

Purchase Details: view

Thanks to Sven for finding this unit and posting it in the comments of another post!

Big Price Cut at Cortez Blu Condominiums

I think that downtown has a real challenge in 2007 in terms of stopping the losses that the market has been incurring. Below is an email snippet from the developer of Cortez Blu. While they aren't saying "PRICE CUT" this unit has clearly taken a reduction. At $345 a square foot this relative bargain is a sure sign that developers that are long unsold units in new developments will cut prices in order to move inventory. There are thousands of new condominium units coming to the downtown neighborhoods in 2007 & 2008.

The Lodge at Bankers Hill new condominium development has also endured a price cut.

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Flipper Couple takes Double Loss on Downtown Condos at Portico #505

Same exact story as Portico unit #406 except this unit cost more so the loss is bigger.

As noted in the #406 entry my records show that this and unit #505 are owned by the same couple.

Type: Listed on MLS(#068068385)

Resale Price: $335,000
Cost: $375,000

Loss@6% Sales Expenses: $60,100
Loss%: 16.03%

Purchase Date: 03/28/2005
Holding Period: 17 months and counting...

Bedrooms: 1
Bathrooms: 1
Square Feet: 728

Purchase Details: view

Downtown Condo at Portico #406

Pretty generic and spartan one bedroom condo that's taking on some serious water.

Note that my records show that this and unit #505 are owned by the same couple.

Type: Listed on MLS(#068068255)

Resale Price: $325,000
Cost: $350,000

Loss@6% Sales Expenses: $44,500
Loss%: 12.71%

Purchase Date: 03/28/2005
Holding Period: 17 months and counting...

Bedrooms: 1
Bathrooms: 1
Square Feet: 728

Purchase Details: view

Stats: Top 10 Downtown Condos by Loss

Since we're up to 63 properties tracked and many of them are downtown condos I thought a stats post that shows the top 10 loss in order by loss amount would help everyone get a quick read on the downtown condo market.

It's interesting to say the least that all 10 of these units has an assumed loss greather than $100,000.

Property	Loss	Details
Park Place #3001	$220,000	view
Renaissance #507	$196,940	view
Park Place #1405	$176,900	view
The Grande #1305	$163,000	view
Treo #817	$162,000	view
Treo #2106	$143,640	view
Village Walk #409	$142,140	view
Discovery #907	$137,500	view
The Mills #405	$118,861	view
Village Walk #406	$105,140	view

Massive Loss on Another Condo that Sells for less than 2004 Value - Treo #817

Treo is a mid-level quality high rise condo in the Columbia District.

This example of our market in decline is yet another example of property selling for less than it was purchased for in 2004.

Type: Closed Sale

Resale Price: $800,000
Cost: $914,000

Loss@6% Sales Expenses: $162,000
Loss%: 17.72%

Resale Date: 06/08/2006
Purchase Date: 10/14/2004

Holding Period: 20 months

Bedrooms: 3
Bathrooms: 2
Square Feet: 1629

Purchase Details: view

Resale Details: view

Thanks goes out to downtown sideliner for helping to find this property

Downtown Condo at Portico #513

Portico is located downtown in Little Italy. This building is only a year old but already has several units that are listed at a loss to the original owner. Since these units are very bare bones, most don't have balconys, very low budget finishes and only one parking spot. Portico was designed and developed to be a rental project and was converted into condos before completion

Type: Listed on MLS(#066050329)

Resale Price: $452,000 (Range priced $439,500 to $464,500)
Cost: $475,000

Loss@6% Sales Expenses: $50,120
Loss%: 10.55%

Bedrooms: 2
Bathrooms: 2
Square Feet: 934

Purchase Date: 06/30/2005

Holding Period: 14 months and counting...
Purchase Details: view

The Secret is Out: Downtown Condo at Village Walk #409

This property has a number of interesting things going on, another $100,000+ loss, the third unit featured from Little Italy's Village Walk development and most interesting is the text from the MLS listing:

"Wow!This condo is priced $111,000 less than paid for 2 years ago!" This is the first time I've seen the market downturn acknowledged in a MLS listing.

Also this condo is hitting the market on day one with such a reduced price relative to where it sold in October 2004. Many of the properties that I've featured on the site have been on the market for quite some time before the owners cut the price to become realistic.

Type: Listed on MLS(#066072619)

Resale Price: $519,000
Cost: $630,000

Loss@6% Sales Expenses: $142,140
Loss%: 22.56%

Purchase Date: 10/13/2004
Holding Period: 22 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 1264

Purchase Details: view

840 Harbor Cliff Way #294, Oceanside, CA 92054

This Oceanside condo is barely a year old and has slipped in value just over 5%.

Type: Listed on MLS(#061066010)

Resale Price: $525,000
Cost: $557,500

Loss@6% Sales Expenses: $64,000
Loss%: 11.48%

Purchase Date: 10/31/2005
Holding Period: 10 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 1145

Purchase Details: view

Thanks goes out to an anonymous poster in a prior entry for finding this property

5094 Via Manos #A, Oceanside, CA 92057

This is our first visit to Oceanside.

Here's a property that's listed post cosmetic remodel for less than it last sold for back in December 2004.

Type: Listed on MLS(#061064168)

Resale Price: $308,900
Cost: $315,000

Loss@6% Sales Expenses: $24,634
Loss%: 7.82%

Purchase Date: 12/11/2004
Holding Period: 20 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 951

Purchase Details: view

Thanks goes out to an anonymous poster in a prior entry for finding this property

San Diego Market Monitor Statistics

The biggest dollar loss so far has been taken at a 30th floor luxury unit at Park Place. view

The biggest loss percentage on a downtown condo has been on a foreclosed unit at Renaissance. view

Finally the biggest loss percentage recorded on this site to date is on a property in Rancho Bernardo. view

Total Losses: $4,399,178

Total Properties Tracked: 59

Average Loss%: 12.49%

Largest Loss: $220,000

Largest Loss%: 29.66%

Say You Want a Revolution

Columnist Catherine Hockmuth of The Voice of San Diego discusses the current "buyers market".

Catherine also wrote a great piece on renting recently.

I highly recommend both of these articles.

I'll add to her comments that you need to negotiate well and get a good deal for yourself if you're buying in this market. You could easily find yourself $100,000 underwater if you don't do your homework. Her idea of factoring in 5% growth since 2001, a reasonable growth rate of a normal, non-bubble market is a good way of looking at the market. I've actually used the same exact methodology in some of my analysis work. Perhaps I'll add a "5% annual growth rate since 2001" statistic to my posts.


Thanks to Mark for pointing out this article in the comments of a prior post!

Downtown Condo at Palermo #507

Palermo is techically located in downtown's Cortez Hill neighborhood but isn't on the hill and is right on the border with Little Italy.

This building was designed and built as rental apartments (read lower quality) and was coverted into condominiums before completion.

At this point downtown there are many run of the mill one bedrooms on the market (and many coming in 2007) so there really isn't anything to make these properties stand out, except affordability which means lower prices.

Type: Listed on MLS(#061068322)

Resale Price: $425,000
Cost: $441,000

Loss@6% Sales Expenses: $41,500
Loss%: 9.41%

Purchase Date: 04/25/2005
Holding Period: 16 months and counting...

Bedrooms: 1
Bathrooms: 1
Square Feet: 749

Purchase Details: view

Another Downtown Luxury Condo Posts a Big Loss - Park Place #1405

This site's biggest recorded loss to date is $220,000. This unit is challenging for the biggest loss title as it's coming in at $176,000. Interestingly enough both of these large loss units are located at Park Place (check the search below or the archives to find the other unit).

Park Place is a Bosa development in downtown's Marina District.

Also noteable is that unit is listed for 10% less than it's value in late 2004!

Price cut history:

Price Reduced: 07/30/06 -- $965,000 to $945,000
Price Reduced: 08/10/06 -- $945,000 to $925,000
Price Reduced: 08/17/06 -- $925,000 to $865,000

Type: Listed on MLS(#066049547)

Resale Price: $865,000
Cost: $990,000

Loss@6% Sales Expenses: $176,900
Loss%: 17.87%

Purchase Date: 12/02/2004
Holding Period: 20 months and counting...

Purchase Details: view

Downtown Luxury Condo at the Meridian #1408

The Meridian is downtown's original luxury tower. Unit #1408 is the first property from Meridian to join the list.

This property was purchased in January of this year and relisted shortly thereafter.

Is this a flipper investment gone awry?

Price cut history:
Price Increased: 04/13/06 -- $735,000 to $739,500
Price Reduced: 05/18/06 -- $739,500 to $699,000
Price Reduced: 06/14/06 -- $699,000 to $675,000
Price Reduced: 08/11/06 -- $675,000 to $650,000

Type: Listed on MLS(#066030286)

Resale Price: $650,000
Cost: $687,000

Loss@6% Sales Expenses: $76,000
Loss%: 11.06%

Purchase Date: 01/19/2006
Holding Period: 7 months and counting...

Purchase Details: view

Up to $120,000 Price Cuts at The Lodge at Bankers Hill

The Lodge at Bankers Hill is a new development that was supposed to be rentals. The project has been converted into for sale condominiums. It should be ready for move ins this fall.

They have announced price cuts and a 4% commission for real estate agents.

I'll speculate that this is going to a very common occurance for the many new projects that are hitting the market over the next year. Stay tuned to this blog as I'll be posting on price activity as I document it.

Single Family Home in Rancho Penasquitos - 12495 Brickellia St.

Rancho Penasquitos join the list with this single family home.

Type: Listed on MLS(#066028880)

Resale Price: $699,000 (Range priced $669,000 to $729,000)
Cost: $775,000

Loss@6% Sales Expenses: $117,940
Loss%: 15.22%

Purchase Date: 06/28/2005
Holding Period: 14 months and counting...

Bedrooms: 4
Bathrooms: 3
Square Feet: 2420

Purchase Details: view

Credit goes to MANmom with an assist to Lew Breeze as they pointed out and located the details on the property. Thanks guys.

UPDATE: Downtown Condo at The Mills #405

This was actually the very first property featured on this blog back in April. It's still on the market and has taken a $25,000 price cut that puts this property into the growing list of downtown condos that is underwater over $100,000.

Type: Listed on MLS(#066026210)

Resale Price: $720,000
Cost: $795,661

Loss@6% Sales Expenses: $118,861
Loss%: 14.94%

Purchase Date: 10/07/2004
Holding Period: 22 months and counting...

Bedrooms: 3
Bathrooms: 2
Square Feet: 1702

Purchase Details: view

Prior Blog Entry: view

Another Downtown Flipper Condo at Metrome #813

I remember walking down 6th Avenue in the Gaslamp a few years ago. At the time this development was still under construction. I dropped by the Metrome sales office to see the model. I was told emphatically that I need to buy and that they only have a "few units left for sale."

As it turns out Barratt American still has units for sale and the investors that bought are taking losses.

This is the third Metrome condo on this list. Check the search box at the very bottom of the page to find the other two if you're interested in the details.

Type: Listed on MLS(#066044950)

Resale Price: $344,500
Cost: $349,700

Loss@6% Sales Expenses: $25,870
Loss%: 7.40%

Purchase Date: 12/30/2005
Holding Period: 8 months and counting...

Bedrooms: Studio
Bathrooms: 1
Square Feet: 605

Purchase Details: view

Downtown San Diego Condo Downturn Featured in Nationwide News Release

The Boston Globe picked up an Associated Press article that focuses on San Diego.

I will say that while this article is useful I'm amazed that they don't reference the specific losses that people are taking on downtown condos.

With all the new projects coming in 2007 next year will be very interesting.

Downtown Condo at Treo #1313

This is the fourth unit at Treo to make the list. The MLS listing describes this unit as a rarely used vacation home with views from every room that has recently had $60,000 in upgrades.

The price was cut on July 14 from $680,000 to the current price of $649,000.

Note the loss calculation below does not factor in upgrades although clearly that's an additional loss in value.

Type: Listed on MLS(#066041054)

Resale Price: $649,000
Cost: $660,000

Loss@6% Sales Expenses: $49,940
Loss%: 7.57%

Purchase Date: 01/05/2005
Holding Period: 19 months and counting...

Purchase Details: view

Yet Another Acqua Vista Condominium - #1406

Acqua Vista is an apartment conversion in Little Italy. It was designed and developed as an apartment building and was sold midway through the development of the building to Hovnanian and was sold as condominiums.

This is the 6th property to make the list. Note that this condo was purchased from the developer and wasn't a flipper unit. There are many units at Acqua Vista that were resold by the first investors. These units are very clearly deeply underwater at this point.

Type: Listed on MLS(#058072623)

Resale Price: $362,000 (Range priced $350,000 to $375,876)
Cost: $381,000

Loss@6% Sales Expenses: $40,720
Loss%: 10.69%

Purchase Date: 03/09/2005
Holding Period: 17 months and counting...

Bedrooms: 1
Bathrooms: 1
Square Feet: 655

Purchase Details: view

Another $100,000+ Loss on Downtown Condo at City Walk #320

City Walk was built in 2003 and is downtown's Marina District.

This may have been flipper unit as the property was relisted nine months after the closing. Below is the price cuts that the unit has undergone.

Price Reduced: 12/14/05 -- $860,000 to $839,500
Price Reduced: 03/21/06 -- $839,500 to $819,500
Price Reduced: 04/24/06 -- $819,500 to $795,000
Price Reduced: 06/21/06 -- $795,000 to $765,000
Price Reduced: 07/17/06 -- $765,000 to $750,000

Type: Listed on MLS(#050071897 )

Resale Price: $750,000
Cost: $810,000

Loss@6% Sales Expenses: $105,000
Loss%: 12.96%

Purchase Date: 02/24/2005

Holding Period: 18 months and counting...
Bedrooms: 2
Bathrooms: 2
Square Feet: 1332

Purchase Details: view

$100,000+ Loss on Downtown Condo at Village Walk #406

Here's another large loss on a condo that was purchased in June of 2004.

Village Walk is a nice project located on the main strip in Little Italy.

Type: Listed on MLS(#066035460)

Resale Price: $569,000
Cost: $640,000

Loss@6% Sales Expenses: $105,140
Loss%: 16.43%

Purchase Date: 06/24/2004
Holding Period: 26 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 1232

17% Loss at Downtown Condo at Park and 10th on Cortez Hill #107

This building was built in 1983 and is one of the oldest condo projects in downtown San Diego. It's up on Cortez Hill and is in reasonable shape.

Type: Listed on MLS (#066053984)

Resale Price: $410,000 (Range priced $405,000 to $415,000)
Cost: $469,500

Loss@6% Sales Expenses: $84,100
Loss%: 17.91%

Purchase Date: 10/01/2004
Holding Period: 22 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 1004

Purchase Details: view

Downtown Condo at Hawthorn Place in Little Italy #105

This is building is only a few years old and is located on the main strip in Little Italy.

The building is fairly nice but doesn't have any amenities.

Type: Closed Sale
Resale Price: $515,000
Cost: $564,000

Loss@6% Sales Expenses: $79,900
Loss%: 14.17%

Resale Date: 08/24/2005
Purchase Date: 10/08/2004

Holding Period: 10 months

Bedrooms: 2
Bathrooms: 2
Square Feet: 1018

Purchase Details: view

Resale Details: view

Downtown Condo at 350 West Ash #705

This is a 7th floor studio so it will have somewhat of a view. It's very small.

350 West Ash is an "adaptive reuse" project as it was converted recently from an office building into condominiums.

Resale Price: $328,000
Cost: $330,500

Loss@6% Sales Expenses: $22,180
Loss%: 6.71%

Purchase Date: 06/25/2005
Holding Period: 14 months and counting...

MLS: 061034959

Purchase Details: view

Resale Details: view

San Diego House Sales Down Again

The San Diego Union Tribune reports on the new DataQuick numbers which show that "Coupled with a slide in sales activity, the decline in median prices followed a 1 percent year-over-year reduction recorded for June. Taken together, the two summer months showed the first back-to-back downturn in prices here since May and June of 1995."

This article also has some great anecdotes about the psychology of the market changing.

Downtown Condo at Village Walk sells for less than 2004 Value - #308

Village Walk in Little Italy joins the list of downtown developments that has had a condo sell for a loss.

Resale Price: $600,000
Cost: $643,600

Loss@6% Sales Expenses: $79,600
Loss%: 12.37%

Resale Date: 05/15/2006
Purchase Date: 08/10/2004
Holding Period: 21 months

Bedrooms: 2
Bathrooms: 2
Square Feet: 1228

Purchase & Resale Details: view

UPDATE: Foreclosed Downtown Condo at Renaissance #507

The foreclosed unit feature in a post a few week ago has endured a $30,000 price cut. It's important to keep in mind that financial institutions are not in the business of owning real estate and will want to get these properties off of the books.

Also keep in mind that if you use the current Fed Funds rate of 5.25% and add in taxes and HOA that the bank is paying this vacant unit is costing over $3,000 per month to carry. This makes cutting the price to get it sold the most practical move.

The numbers below have been updated to reflect the reduced price.

**************************************

Listed on Foreclosure.com as fully foreclosed this unit ended up being owned by WMC Mortgage Corp which presumably was the lender on this unit.

Check out Foreclosure.com for a free trial to access more information on this unit.

The site shows this as inactive so let's assume the unit has changed hands again.

Resale Price: $599,000
Cost: $760,000

MLS: 061033138

Loss@6% Sales Expenses: $196,940
Loss%: 25.91%

Purchase Date: 10/25/2004
Purchase Details: view

Bank Owned Downtown Condo - Park Boulevard West #1110

Here's another condo that's fallen into the hands of the lender.

Park Boulevard West is a low rise project in the Ball Park District.

Resale Price: $364,900
Cost: $380,000

Loss@6% Sales Expenses: $36,994
Loss%: 9.74%

Purchase Date: 11/05/2004
Holding Period: 21 months and counting...

MLS: 061069101

Bedrooms: 1
Bathrooms: 1
Square Feet: 689

Purchase Details: view

Downtown Condo at Metrome #504

Metrome is a new building that still has developer units for sale.

I think this transaction illustrates nicely the pending scenarios for thousands of condos that are being delivered downtown in 2007. Investors or even regular buyers close on their unit from the developer only to compete with many brand new units for sale in the same building.

The loss numbers don't include staging or negative cash flows from holding a vacant property.

Resale Price: $501,000
Cost: $509,900

Loss@6% Sales Expenses: $38,960
Loss%: 7.64%

Resale Date: 07/05/2006
Purchase Date: 09/14/2005
Holding Period: 10 months

Bedrooms: 1
Bathrooms: 1
Square Feet: 994

Purchase Details: view

Resale Details: view

Nationwide Home Builder: Oversupply slump worst in 40 years

Toll Brothers came out today with a cut in its earnings forecast and also discussed some major problems in the national housing market.

When will lenders start to pullback on credit terms and start charging higher interest rates?

Icon - New Condo Development Near Petco Park

Based on my ongoing analysis of the downtown market it appears that Icon will be the first of the many new condo towers under construction to be completed and start closing escrows in early 2007.

Icon's tallest building is 24 stories and will house 327 condos.

They are advertising several units in the MLS with somewhat high prices, certainly not bargains. Typically this means there are a number of unsold, non-MLS listed units as the developers rarely expose their entire inventory, especially it if it relatively high.

I would like to understand how "sticky" the escrows are for this project. If early phase pricing is fairly high we may see a high cancellation rate.

Does anyone know what the early phase pricing was like on this project?

Does anyone know how many unsold units this project has?

Large Loss on Luxury Downtown Condo at The Grand South #1305

This property has been on the market for over a year. It was purchased from the original buyer and relisted six months later. Either this was a "double flip" unit or the owners can't sleep at night with the trains that go by all night long.

The MLS pictures look staged, if so this unit is kicking off a lot of negative cash flow to go with the below cost sales price.

Resale Price: $1,050,000 (Range priced $1,000,000 to $1,100,000)
Cost: $1,150,000

Loss@6% Sales Expenses: $163,000
Loss%: 14.17%

Purchase Date: 10/19/2004
Holding Period: 22 months and counting...

MLS: 061050873

Bedrooms: 2
Bathrooms: 2
Square Feet: 1625

Purchase Details: view

Metro Lofts Price Cuts

The San Diego Daily Transcript reports that Metro Lofts which is five individual projects in Little Italy and the Ballpark District has just endured price cuts up to $70,000.

These are loft type rental apartments that are being converted into condos. For the most part none of them have amenities.

I am planning to post an analysis of how many units are in each building and how many have closed sale.

Please note that the story on the San Diego Daily Transcript site requires a login.

The Sun Always Shines in San Diego

The Voice of San Diego reports on the County of San Diego Assessor Greg Smith's opinion on the market.

Single Family House in Pacific Beach - 1713 Diamond Street

Pacific Beach makes the list with this small home near the beach.

Check out the sales history:

08/12/2005: $560,000
01/17/2003: $370,000
05/22/1998: $171,000

How can a property worth $370,000 in 2003 suddenly be worth $560,000 a few years later?

Resale Price: $535,000 (Range priced $510,000 to $560,000)
Cost: $560,000

Loss@6% Sales Expenses: $57,100

Purchase Date: 08/12/2005
Holding Period: 12 months and counting...

MLS: 062067464

Bedrooms: 2
Bathrooms: 1
Square Feet: 568

Purchase Details: view

Thanks to Lickitysplit from the Piggington site for pointing out this property.

Downtown Condo at Acqua Vista #310

This development is taking a real beating as this is the fifth unit that I've posted on in this blog. This illustrates the danger of an apartment conversion purchase. The quality just isn't there, as the market corrects I suspect that converted units will take a larger percentage loss than the higher quality properties.

Resale Price: $316,000
Cost: $331,000

Loss@6% Sales Expenses: $33,960
Loss%: 10.26%

Resale Date: 06/08/2005
Purchase Date: 12/13/2004
Holding Period: 18 months

Bedrooms: 1
Bathrooms: 1
Square Feet: 758

Purchase Details: view

Resale Details: view

Another Foreclosed Condo at Discovery #1902

Here's a bank owned unit that is fully foreclosed and listed for less than its value in June of 2004.

As usual the loss calcuation does not include carrying costs, since this unit is vacant the loss is much more than the value below.

It's interesting to note that this condo was priced at $474,000 by Bosa, the developer in June 2001. Anyone have a guess as to what this unit will be worth in August 2007?

More details about this and thousands of other properties availabe at Foreclosure.com

Resale Price: $805,000
Cost: $820,000

Loss@6% Sales Expenses: $63,300

Purchase Date: 06/25/2004
Holding Period: 26 months and counting...

MLS: 061047063

Bedrooms: 2
Bathrooms: 2
Square Feet: 1230

Purchase Details: N/A

Downtown Condo at Vista Acqua Vista #212

Add unit #212 to the growing list of Acqua Vista condos that have sold for a loss.

Resale Price: $332,000
Cost: $337,798

Loss@6% Sales Expenses: $25,718
Loss%: 7.61%

Resale Date: 06/15/2006
Purchase Date: 07/20/2004
Holding Period: 23 months

Bedrooms: 1
Bathrooms: 1
Square Feet: 769

Resale Details: view

Purchase Details: view

San Diego Market Monitor Statistics

It's been an interesting few months, I thought I'd share some statistics that I've compiled from the posts in this blog. If you want to read the details there is a Google Search at the bottom or you can browse the archives using the links on the right side of the screen.

Total Losses: $2,862,926

Total Properties Tracked: 38

Average Loss%: 12.41%

Largest Loss: $220,000

Largest Loss%: 29.66%

Downtown Condo at Discovery #907

This unit is in pretty rough shape as it only has one parking spot which most large units downtown offer.

Discovery is a nice building located on Cortez Hill which is the outermost neighborhood in the city.

The MLS pictures show a vacant unit so there is likely a motivated seller holding this unit.

Resale Price: $625,000 (Range priced $599,649 to $649,000)
Cost: $725,000
Loss@6% Sales Expenses: $137,500

Purchase Date: 08/05/2004
Loss%: 18.97%
Holding Period: 24 months and counting...

MLS: 066053535

Bedrooms: 2
Bathrooms: 2
Square Feet: 1230

Purchase Details: view

UPDATE: Downtown Condo at Crown Bay #404

This for sale unit was price cut another $30,000 today. This moves the loss up to $54,600.

***************************

First known loss at Crown Bay. This building is a midrise property in the Gaslamp Quarter across from the San Diego Convention Center

Resale Price: $410,000
Cost: $440,000

Loss@6% Sales Expenses: $54,600

Purchase Date: 07/01/2005

MLS: 066044081

Holding Period: 12 months and counting...
Bedrooms: 1
Bathrooms: 1
Square Feet: 694

Purchase Details: view

Yet Another Treo Unit Sinks Below 2004 Valuation - Treo #1700

Thanks to Dave for pointing out this Treo unit in the comments from an earlier post.

I'm using an average price to calculated the loss even though it sounds like it fell out of escrow at $750,000. Sometimes I try to look on the brightside. :)

Note that this unit does appear to be blocked by some of the future development between India Street and the Bay so this unit has lost some of it's "location location location" appeal since the last time it changed hands.

Resale Price: $789,938
Cost: $845,000

Loss@6% Sales Expenses: $102,458
Loss%: 12.13%

Purchase Date: 06/30/2004
Holding Period: 26 months and counting...

Bedrooms: 2
Bathrooms: 2.5
Square Feet: 1337

Purchase Details: view

San Diego Mortgage Defaults Double

Yet another datapoint on our declining market, the San Diego Union Tribune reports that mortgage default notices more than double.

I think it's safe to assume that a fair number of these homes will be for sale as the current owners are not able to carry the monthly payments.

Check out Foreclosure.com for a free trial to view all of San Diego's foreclosure activity.

Vacant Flipper Studio Gets 4th Price Cut - Park Boulevard East #111

The psychology of this market is very interesting to observe. This unit was originally listed in the high 300s and has since been price cut to the exact price the investor paid just over a year ago.

Since I personally visited this unit awhile back I can tell you that it was rented for awhile but has been vacant for a solid four months while the unit has been for sale. I have to say that the unit isn't worth much more than $1,500 per month which indicates a price much much lower than $299,900.

Note that as usual the loss below does not factor negative cash flow.

Resale Price: $299,900
Cost: $299,900

Loss@6% Sales Expenses: $17,994
Purchase Date: 06/28/2005
Holding Period: 14 months and counting...

MLS: 066006475

Bedrooms: 1
Bathrooms: 1
Square Feet: 667

Purchase Details: view

Multi-Million Dollar Condo Takes a Loss - Park Place #3001

No sector of the market seems immune to the price reduction trend. This is the first known loss taken at Park Place which is a condo tower in downtown San Diego's Marina District

Resale Price: $2,000,000
Cost: $2,100,000

Loss@6% Sales Expenses: $220,000

Resale Date: 06/15/2006
Purchase Date: 01/03/2005

Loss%: 10.47%

Bedrooms: 2
Bathrooms: 2
Square Feet: 2047

Purchase Details: view

Resale Details: view

UTC Apartment Conversion Project Reverts to Rentals, Lawsuits Begin

Very interested San Diego Union Tribune article about a UTC area project. The lawsuits are over misrepresentations over square footage. It's also very noteable that they are haven't sold out phase one and phase two is staying as rentals for the moment. The people that bought in phase one are very much in trouble.

Wow, Phoenix is Falling Apart

Here's a slight departure from the San Diego Market, very telling article about what is taking place in Phoenix right now.

Downtown Condo at Park Boulevard East #217

This is the first loss taken at Park Boulevard East. It's also noteable that this project is probably the newest actual condo project that has shown a losing transaction.

Resale Price: $520,000
Cost: $513,908

Loss@6% Sales Expenses: $25,108

Resale Date: 11/29/2005
Purchase Date: 06/22/2005
Holding Period: 5 Months

Bedrooms: 2
Bathrooms: 2
Square Feet: 1077

Purchase Details: view

Resale Details: view

325 S Sierra Ave #38, Solana Beach, CA 92075

Solana Beach isn't immune to the price declines.

Thanks to an Anonymous poster for point this property out.

Resale Price: $750,000
(Range priced: $725,100 - $774,900)
Cost: $800,000

Loss@6% Sales Expenses: $95,000

Purchase Date: 09/08/2005
Loss%: 11.88%
Holding Period: 10 months and counting...

Bedrooms: 2
Bathrooms: 2
Square Feet: 1230

Purchase Details: view

Downtown Condo at Crown Bay #404

First known loss at Crown Bay. This building is a midrise property in the Gaslamp Quarter across from the San Diego Convention Center

Resale Price: $440,000
Cost: $440,000

Loss@6% Sales Expenses: $26,400

Purchase Date: 07/01/2005

Holding Period: 12 months and counting...
Bedrooms: 1
Bathrooms: 1
Square Feet: 694

Purchase Details: view

6132 Mystra Pt., SD - Carmel Valley, CA 92130

Here's a condo in Carmel Valley that's been price cut substantially below late 2005 cost.

Resale Price: $599,900
Cost: $662,383

Loss@6% Sales Expenses: $98,477
Loss%: 14.87%


Purchase Date: 12/23/2005
Holding Period: 7 months and counting...

Bedrooms: 4
Bathrooms: 2
Square Feet: 1572

Purchase Details: view

Very Interesting Article on Condo Sales Practices

I'm making a slight deviation from my usual posts about price depreciation to point out a very interesting article by Will Carless with the Voice of San Diego.

Make your own judgements about the article, as for me I'd never do business with real estate agents that are only concerned about their commission.

Flipper Condo in Trouble at Metrome #608

Based on the pictures and the late 2005 closing date this condo has never been lived in. This is also interesting as most of examples of price decline are units purchased from flippers who bought from the developers. This unit was only changed hands once.

The loss figure below does not include negative cash flow, cost of staging and also assumes an unlikely full price offer.

Resale Price: $385,000
Cost: $381,200

Loss@6% Sales Expenses: $19,300

Bedrooms: 1
Bathrooms: 1
Square Feet: 716

Purchase Date: 10/25/2005
Holding Period: 9 months and counting...

Purchase Details: view

Foreclosed Downtown Condo at Renaissance #507

Listed on Foreclosure.com as fully foreclosed this unit ended up being owned by WMC Mortgage Corp which presumably was the lender on this unit.

Check out Foreclosure.com for a free trial to access more information on this unit.

The site shows this as inactive so let's assume the unit has changed hands again.

Resale Price: $627,500
Cost: $760,000

Loss@6% Sales Expenses: $170,150

Purchase Date: 10/25/2004
Purchase Details: view

526 Via De La Valle #A, Solana Beach, CA 92075

Thanks to an Anonymous poster for this example of a Solana Beach property. Note this has been on the market for 260+ days.

Resale Price: $645,000
Cost: $635,000

Loss@6% Sales Expenses: $28,700
(Note that it's very unlikely this unit will sell for list price so this loss estimate is conservative.)

Purchase Date: 03/01/2005
Purchase Details: view

Downtown Condo at Treo #2106

Condos selling for less than 2004 prices is starting to be a pretty clear pattern.

Resale Price: $644,000
Cost: $749,000

Loss@6% Sales Expenses: $143,640

Resale Date: 03/30/2006
Purchase Date: 09/17/2004
Holding Period: 18 months

Purchase Details: view

Resale Details: view

Failed Condo Conversion Investment - 4525 Florida Street

The Voice of San Diego reports "...an example a small apartment building in North Park that has sold four times in six years.

The building, 4525 Florida Street, sold in March 2004 for $2.1 million to an investor who planned on converting the property to condos. The investor spent tens of thousands of dollars getting the building permitted for condos but then decided to bail on the project as the condo market slumped. He then sold the property as an apartment building in May 2006 for $1.7 million -- netting a loss of at least $365,000."

My guess is that the loss here is much for than $365,000 as there is likely quite a lot of legal work and carry costs that the investor is also out.

Downtown Projects Completing in 2006

I dropped by a downtown condo open house recently. The listing agent that was hosting the open house was talking about the market and how prices haven't gone down very much and since there are "no more new condos coming this year so the resale market will be steady."

I knew right away that there was at least once project completing so I did a little research. Below is a table of projects that should be completed in 2006.


In terms of sales activities at these projects I have heard that Aloft at Cortez Hill has about 50 units out of 168 under contract. There are units for sale at Sky and Samuel Fox Lofts and at Nexus.

If you know of any other projects completing in 2006 reply to this post and I'll update the post.

Downtown Condo Sells for less than 2004 Value - Marina Park #425

This is a fairly old complex in the Marina District. Since the units are quite old I suspect that the unit was upgraded before the losing resale. I can't confirm this speculation however. This unit is very noteable as the resale price is LESS than what the property sold of in September 2004.

Resale Price: $560,000
Cost: $609,000
Loss@6% Sales Expenses: $82,600

Resale Date: 05/26/2006
Purchase Date: 09/24/2004
Holding Period: 20 months

Purchase Details: view

Resale Details: view

First Loss at the Downtown Condo Tower The Grande #1603

Here's the first known loss at The Grande, this unit is in the South tower as has changed hands three times. The second buyer lost $84,380 on the unit.

Resale Price: $573,000
Cost: $623,000

Loss@6% Sales Expenses: $84,380
Percentage Loss: 13.5%

Resale Date: 5/5/2006
Purchase Date: 12/13/2004
Holding Period: 1.40 Years


Cost Details: view
Sale Details: view

Acqua Vista #607

Yet another Acqua Vista Condo that has sold for a substantial loss. This was a 693 square foot 1 bed/1 bath unit.

Resale Price: $256,397
Cost: $311,080

Loss@6% Sales Expenses: $70,067
Percentage Loss: 22.5%

Resale Date: 5/25/2006
Purchase Date: 10/6/2004
Holding Period: 596 Days


Cost Details: view
Sale Details: view

Another Downtown Condo in Trouble - La Vita #1909

Here's another downtown condo that has a serious negative cash flow problem. Purchased for $810,000 on 4/15/2005 it's now for rent for $2,750 with owner paid electric bills. The rental listing also talks about $30,000 in owner upgrades - the pictures show a nice unit, no question on that.

Let's run some numbers on this, for this analysis I'll assume that the $840,000 "rents" for 4.35%, the same rate that you can get from ING Direct with and Orange Savings Account.

$840,000 @ 4.35% = $3,045 monthly
HOA is $395 monthly
Assume property tax of $200 montly

Total Monthly Cost: $3640
Rent $2,750 - 200 agency fee = $2,550

The unit is losing $1,100 per month.

To make matters more painful La Vita #1802 which has a superior bay view just sold for $725,000. La Vita #1802 unit was also featured on this blog. These units are virtually identical and make great comps. Assuming an identical sales price for this unit and standard 6% selling expenses the loss is a painful $158,500

Rental Listing: view

Purchase Details: view

Downtown Condo at Palermo #314

This unit is located in the Palermo which is another one of downtown's apartment conversions. It has been resold and was owned for about six months.

Resold Price: $368,000

Purchase Price: $371,800

Loss @6% Sales Expenses: $25,880

Resale Date: 5/25/05

Purchase Date: 11/5/04

Purchase Details: view

Resale Details: view

Downtown Condo at Acqua Vista #519

Purchased for $436,412 on 8/27/2004. This unit has been for sale for almost a year. This is the second known unit at Acqua Vista to go negative. I do think that at this point in the market virtually the entire complex is worth less or barely breakeven compared to where the units originally sold.

Current Price: $424,000

Purchase Price: $436,412

Loss @6% Sales Expenses: $37,852

Purchase Date: 8/27/2004

MLS#: 054060443

Purchase details: view

Downtown Condo at Union Square #2608

While this condo shows a relatively minor loss it's notable that this loss is being taken by the initial buyer of the condo not someone that bought a flipped unit. This is the first time I have seen this at the Union Square development.

Current Price: $412,000

Purchase Price: $410,000

Loss @6% Sales Expenses: $22,720

Purchase Date: 1/26/2005

Purchase Details: view

MLS#: 061060268

UPDATE: "777 Lofts at 6th Avenue - “For my age group, there's no way I can lose”"

Last month I posted an entry about the Lofts at 777 6th Ave.

At that time nine out of 103 units had been sold. The County of San Diego database has been updated and shows that three more units have closed sale.

At that pace the project will take over two and half years to sell out.

San Diego Real Estate Market Poll

The San Diego Real Estate Market will do the Following over the Next Year
	Down 30%
	Down 20%
	Down 10%
	No Change
	Up 10%
	Up 20%
	Up 30%
Free polls from Pollhost.com

Interesting Facts Related to UT Price Decline Article

The Union Tribune Article that discusses our first year over year decline in prices in ten years had this interesting quote:

"Todd Fleischmann, 26, moved from Escondido to Portland, Ore., in January to take a new job. He has yet to sell his Escondido condominium, but he recently lowered the price from $361,5000 to $338,000."

I did a little bit of digging and based on my research this unit is MLS #066054078 and was purchased for $325,000 on 8/6/2004. Assuming a 6% sales charge and full price offer the owner is out $7280 and that's not including carrying costs as the MLS listing notes the property is vacant.

Nevertheless the unit is listed barely above what it sold for two years ago. I think the numbers are going to get much worse as we roll through 2006 and 2007.

Wow, massive loss - 14688 CARMEL RIDGE, SD - Rancho Bernardo, CA 92128

This is a massive loss both cash and percentagewise from the last transaction on this property in late 2005.

This is from the MLS Listing Description:

Short sale!!! Short sale!!! Short sale!!!! Lender approval required to purchase property. Great deal (just check the comps). Bring your offers asap before you miss this great deal.

Current Price: $540,000-590,000

Purchase Price: $735,000

Loss @6% Sales Expenses: $227,400

Purchase Date: 12/23/2005

MLS#: 066058946

Purchase Details: view

Thanks to masayako on the Piggington site for finding this significant example of our declining real estate market.

16.44% Loss in Less Than One Year - 350 West Ash #104

350 West Ash is a condominium project in downtown San Diego. It's an office building that was converted into condos.

This unit has already been resold. It was owned for slightly less than a year and assuming 6% cost to sell lead to a loss of $70,318 to the owner.

Resold Price: $380,000

Purchase Price: $427,518

Loss @6% Sales Expenses: $70,318

Resale Date: 5/31/2006

Purchase Date: 6/16/2005

Purchase Details: view

Resale Details: view

Downtown Condo Project to be Auctioned Off

I normally don't post news articles, however a sale of an entire project before construction starts is a downtown San Diego first and is worth noting as another sign that that market has changed.

This article on the San Diego Daily Transcript website which does require registration/membership. You could also pickup a copy at the news rack.

Developer turns to auction of downtown condo, before ground broken

Laurel Bay Apartments - San Diego's First Reversion?

Thanks to SwimJet for pointing out and asking for more information of this project.

Laurel Bay Apartments is on Bankers Hill at the intersection of 5th and Laurel. It's actually a pretty nice building in a good location.

The apartment building was purchased by Hammer Ventures in June 2004 for $56.6 Million and was quickly converted to for sale condos.

There are 150 units in the building, County of San Diego records show that only 41 have been resold. Incredibly County records show only two closings in 2006. Sales are clearly slow for this project and given the price declines that are occuring downtown these condos will not sell at the current prices or the units will go back to rentals.

It's also worth noting that Foreclosure.com shows one unit at Laurel Bay is in preforeclosure proceedings.

SwimJet points out and I've also noticed that this building is very dark and there isn't much going on, this anecdotal observation and the hard facts indicate that this project simply isn't going well for the investors that converted the apartments into condos.

Based on my calculations there is around $32 Million dollars worth of condos sitting empty up on Bankers Hill. I arrived at this calucation by subtracting the total units sold as well as the resale of the commercial condos (~$7 Million) less estimated sales costs.

Could this be San Diego's first apartment conversion gone bad? As the national housing bubble deflates many of these projects are giving up on going condo.

You have to wonder how the 41 people that did but into the project will react when the remaining 100 units go back to rental status.

The Mills #531

As noted in a prior posting, the loft units at the Mills are quite possibly the most overpriced real estate in all of downtown San Diego. The Mills was built to be a rental community which was converted into condos at the end of the construction of the building so the quality just isn't there.

Here is another loft unit that's listed to leave the current owner with a loss. While I'm only counting the loss between purchase price and the current list price this unit has a ton of upgrades, much more than the typical Mills unit so this owner is out easily over $100K and that's if it sells for this price, fairly unlikely given the low quality of the building relative to what's going on in the rest of the market.


Current Price: $579,000

Purchase Price: $609,900

Loss @6% Sales Expenses: $65,640

Purchase Date: 3/16/2005

MLS#: 066009493

Purchase Details: view

Honey Who Shrunk the Equity? - The Mills #515

This is a two bedroom unit in The Mills which is in the Cortez Hill neighborhood downtown. The building was designed and built to be rentals but was converted at what might have been the peak of the market. The unit closed on 9/16/2004, nearly two years ago. The price paid back then was $549,500. The list price two years later? $549,000, which is still more than it's worth in today's market but if nothing else indicates zero appreciaton over two years.

Current Price: $549,000

Purchase Price: $549,500

Loss @6% Sales Expenses: $33,400

MLS: 061056325

Purchase details: view

Anatomy of an "Investment" - La Vita #1802

Speculators have not left the San Diego real estate market.

La Vita is a 23 story condo building in downtown's Little Italy neighborhood.

Unit #1802 was for sale for several months and finally went into and closed escrow at $725,000 this June.

This unit has hit the rental market for a whopping $3000 per month. Even if this investor gets this amount of money the negative cash flow is frankly stunning given what the market is doing. Note that water view La Vita two bedroom units are actually renting more in the $2300-2500 range so this over-priced rental will likley lag on the market for some time before finding a tenant.

Assuming a cost of funds of 6%, $400 HOA and standard taxes that monthly carrying cost of this unit is over $4000 resulting in a solid $1,000 negative cash flow. All this in a declining market.

Note that La Vita #2003 same floor plan, sold at the high in the market for $810,000.

Rental Listing:

http://sandiego.craigslist.org/apa/176430165.html
OR
http://www.tonytannouri.com/lavita

Finally the rental listing and the now expired for sale listing both talked about "permanent bay views", this is quite debatable as there is no known reason why the property in front of this unit cannot be developed. If you have any information pro or con to this effect by all means post a reply. I'd love to know the facts.

3142 Sycamore Hts., Escondido 92027

Once again thanks to CA Renter for tipping me off to this and the Oceanside post.

This property is in foreclosure and is for sale. Type zip code 92027 into the Foreclosure search box on the right to see this foreclosure and the rest of the growing list in San Diego.

Foreclosed Offering Price: $849,900

Purchase Price: $924,900

Loss @6% Sales Expenses: $125,394 WOW
(Does not include loss on upgrades, carry costs, etc)

Purchase Date: 10/29/2004

Purchase Details: view

4942 Gabrielieno in Oceanside, 92057

Thanks to CA Renter for tipping me off to this and the next post.

Resold Price: $475,000

Purchase Price: $507,000

Loss @6% Sales Expenses: $60,500
(Does not include loss on upgrades, carry costs, etc)

Resale Date: 2/6/2006

Resale Details: view

Purchase Date: 9/28/2005

Purchase Details: view

Portico #309

Another tiny Portico two bedroom (less that 900 square feet) that's listed for a loss. This is yet another building that was designed to be rental apartments that was converted to condos at the height of the boom. Based on the MLS pictures the unit is vacant and has never been lived in so you have to assume that this has been a pretty big cash flow drag on the investor.

Current Price: $425,000-450,000

Purchase Price: $469,000

Loss @6% Sales Expenses: $46,000
(Assuming highly unlikely full price offer of $450,000)

Purchase Date: 7/29/2005

MLS#: 068030667

Purchase Details: view

Park Boulevard West #1316

Here's another downtown condo that has changed hands twice and is on the market again listed at a loss to the current owner.

Current Price: $365,000-385,000

Purchase Price: $405,000

Loss @6% Sales Expenses: $43,100 (Assumes an unlikely full-price offer of $385,000)

Purchase Date: 3/11/2004

MLS#: 066033814

Purchase Details: view

This unit was purchased from the developer by the first owner for $347,940 on 9/14/2004.

3**8 Via Baldona, Oceanside, CA 92056

I found this example of property listed below 2004 prices on the Piggnington site.

This loss comes in at $31,800. While I haven't reviewed the analysis it's pretty sound and follows my methodology. It's good to see other people watching their local markets for price movements as we just aren't hearing about these examples in the regular media.

Union Square #2502

This unit has changed hands three times in two years. While the original investor made a compelling profit the second owner didn't do very well.

I do wonder what made something worth $423,000 in 2004 suddenly worth $240,000 more a relative short time later.

I suspect that prices may go down as the original price of low 400s for units like this one.


Date Price Gain/Loss@6% Details
3/4/2006    650,000    $49,000
   view

6/15/2005   660,000    196,510    view

6/10/2004    423,890    N/A      view

777 Lofts at 6th Avenue - “For my age group, there's no way I can lose”

This post doesn't examine a specific unit that is listed or has already sold for a loss, rather this is an entire project that appears to be in serious trouble.

The 777 Lofts at 6th Avenue is an apartment conversion located in the Gaslamp Quarter. San Diego County records as of May show that only nine out of 103 condos have been sold. The project has been for sale for close to a year. The project website is noting that a "MAJOR PRICE REDUCTION" has taken place.

The San Diego Union Tribune published a story with the below:

"Kristian Cabuago, a 27-year-old dentist in Tierrasanta, hopes to spend his first night in the first home of his own, a 950-square-foot top-floor condo at 777 Sixth Ave. in the Gaslamp Quarter. It cost him $550,000 and he thinks he timed his purchase just right when he signed a sales contract earlier this year.

“At that time the news was forecasting condos in downtown and everywhere were suffering,” Cabuago said. “I thought that was a perfect time to buy.”
He negotiated the price down from $591,000 and considered it a bonus that his homeowner association fees will be $250. And he's happy to be moving with his girlfriend from a Rancho Peñasquitos apartment to the lively night life downtown.

“For my age group, there's no way I can lose,” he said. “You can't ask for more.”

Discovery #1503

This unit has already been resold. It was owned for slightly less than a year and assuming 6% cost to sell lead to a loss of $84,860 to the owner. Without consisidering sales costs this was a 6% decline in value in one year.

Resold Price: $681,000

Purchase Price: $725,000

Loss @6% Sales Expenses: $84,860

Resale Date: 9/14/2005

Purchase Date: 9/30/2004

Purchase Details: view

Resale Details: view

The Mills #524

The loft units at the Mills are quite possibly the most overpriced real estate in all of downtown San Diego. The Mills was built to be a rental community which was converted into condos at the end of the construction of the building so the quality just isn't there.

While this unit shows a loss of $46,840 the unit looks to be highly upgraded with pretty good looking wood floors and stainless appliances so the loss is probably close to $75,000.

Current Price: $549,000

Purchase Price: $562,900

Loss @6% Sales Expenses: $46,840

Purchase Date: 4/1/2005

MLS#: 066001168

Purchase Details: view

La Vita #1804

La Vita is an interesting building as the one bedroom units like this one are essentially identical with only view, ground floor patios and stainless kitchen appliances as the only real differences. The owner listed this unit at $470,000 and recently cut the price to $455,000 which is exactly what was paid just over a year ago.

There are several one bedrooms currently listed including unit 1504 which is in the same stack and is listed at $429,000-439,000. An 8th floor La Vita view one bedroom sold for under $380,000 recently. My numbers below assume a sale at list price which is pretty unlikely.

Current Price: $455,000

Purchase Price: $455,000

Loss @3% Sales Expenses: $13,650 (Listed w/ HelpUSell so I'm using 3% sales cost assumption for this unit although I doubt it will sell for list price.)

Purchase Date: 4/29/2005

MLS#: 066037517

Purchase Details: view