Selection of condos available for sale in Downtown San Diego will continue to be tight. As of January 2023 only 0.8% of the total condo market is up for sale (roughly 87 for sale out of 10,850 total condos). Prices have appreciated about 9.4% in the last 12 months. However, due to the recent increase in mortgage rates to 6.5% prices are no longer appreciating and dropped 6% in the 3rd quarter and 2% on the 4th quarter. However, we may have it the bottom. Sales volume is down about 50% lately. The supply/demand equation still favors the Sellers as there are more Buyers than Sellers.
I'm expecting very little turnover in 2023. One reason is the spike in mortgage rates discouraging condo owners with a 3% mortgage from trading up knowing they will give up their low rate for a much higher interest rate. It will take some time for the higher rates to become the new normal and have buyers that are waiting for lower rates to jump back on the market.
If you want a brand new condo, you have to wait till 2026 or later as there are no new condo buildings under construction at the moment. A lot of owners have been doing total remodels on their existing condos, so its possible to buy a resale with a newer updated interior. All but two condo buildings in downtown are over 10 years old now, most are 15-20 years old and just a select few over 20 years old.
There are two huge construction projects going on in Downtown San Diego that will add several thousand jobs and buyers for near by residential properties. To read about them see the articles on my blog.
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