I want to shout out a big THANK YOU to all my wonderful clients who put trust in me throughout the year to enable me to achieve my personal best production in my 20 years with RE/MAX with $31 Million in Sales.

Approximately $20 million of my sales were from repeat clients and their referrals. As most of you know I am an individual Realtor and do not manage a team of agents which allows me to be personally involved in each and every step of your journey in achieving your dreams and ensuring your success. Best wishes to all in achieving their dreams in 2022!

$16 million was from representing 15 Buyers and $15 million was representing 14 Sellers. 

The company you hire to represent you in a real estate sale or purchase matters, the brand your agent works for can help or hurt you.  It matters because of perception both agents and consumers have about the company offering the home for sale or submitting the offer to purchase the home.  This trust can bring more opportunities to the client from both buyers knowing the sale is represented by a trusted company and also helps elevate the competitiveness of your offers compared to offers from lesser known and trusted brokerages.

Wow that Went Quickly!

Seems not long ago there were plenty of condos in Downtown San Diego for buyers to choose from.  There were about 250 resales on the market and 200 brand new unsold condos to choose from.  That was a true statement from 2017 till about 2019.  Then the brand new condo inventory began to shrink quickly and went to zero new units available in summer of 2021.

The number of resale choices has remained very steady for the last few years, even during Covid lock-downs it remained steady.  After the brand new condos got sold out in the two new buildings (Pacific Gate and Savina) the buyers were limited to resales and began buying them up.  

Post pandemic lockdowns of both public venues and building amenities the number of buyers looking to purchase a condo in Downtown San Diego has increased significantly.  One of the reasons for that is a lot of workers can work remotely anywhere and as more people retired and an expedited rate with Covid they want to move here for the weather and walkability. 

Add the lack of new construction with an increasing number of buyers chasing less and less inventory and its getting to a crisis level where buyers have very limited choices now in Downtown.  As of Sept 20, 2021 there are only 128 condos for sale.  Inventory has not been this limited in over 15 years. 

If your a buyer I have some good news and some bad news:  

First the bad news:  There are two huge construction projects (The Campus at Horton and The RaDD) going on in downtown San Diego that will add thousands of new jobs and a lot of those new employees will want to buy a condo downtown to live in, so you will have a lot of competition looking at the same condos you are and perhaps also bidding on the same one you want to buy.

New the good news:  Those new employees are not in the market yet, they wont begin working in downtown for another year or so.  So you have time to shop around before the choices of what to buy shrinks even more.  You also have the opportunity to purchase a condo now that will probably be in more demand in the next few years causing its value to climb over the price you pay today. 

Its no surprise to those who live in downtown San Diego that this is one of the best places in the world to live.  I wont go into all those reasons here but now that people can work remotely and more and more baby boomers are retiring, the demand for a condo in downtown San Diego is very strong. 

This is evidence by the shrinking number of available condos, 138 in 92101 as of Sept 14, 2021.  Compare that to about 400 condos to choose from just 1-2 years ago.  Currently there are no new condo projects under construction in downtown San Diego and for the condos that will get built one day, there are no pre-construction sales going on at this time.  The next new condo building will not be ready for move in till the end of 2024 at the earliest. 

If you thought just the natural migration of remote workers and retirees was all that is driving up prices of condos in downtown, your in for a surprise.  There are two HUGE construction projects going on that will add thousands of new jobs San Diego.  Those are the Campus at Horton and the Research and Development District (RADD).  See my earlier blog post for more about those. 

Here is my latest price chart of the average sold prices for condos in Downtown San Diego.

Well the California Association of Realtors just came out with their forecast for housing prices next year and they are projecting a 4.4% increase in prices.  I know a lot of investors ask me how much a place will rent for and then deduct the monthly HOA fees and annual taxes to come up with the rate of return they will get. 

I think most real estate investments make more money in the long term on the price appreciation more than they do off the cash flow.  Often as you build up more equity in the property you can tap into that equity by refinancing and pulling out money to buy another property.  This is a time proven strategy as many of you know. 

Just wanted to share a third party forecast for next years appreciation rate with you.  Its been my experience in looking back on their forecast that they often produce conservative forecast.  In 2019, they forecast a 2.5% appreciation rate and now in early December 2020 it looks like the actual appreciation rate is going to be 11.6%.  They are usually not that far off. 

San Diego Research and Development District (RaDD)

Formally known as the “Manchester Pacific Gateway Project” and the “Broadway Complex”.

In September 2020 we learned that the stalled Manchester Project on the prime Western bay front of downtown San Diego is being taken over by a biotech REIT named IQHQ.  They took over all the project except for the existing Navy headquarters and the building site next to Broadway, which is being kept by the Manchester group. 

To give a little history of the project, previous plans that were approved but stalled out due to the inability to secure construction financing (at least that what I heard).  That plan was comprised of a big office building adjacent to Broadway with a tiny hotel on the top (see picture) that was to be 400 feet tall.

The next building over was a 350 foot tall twin tower hotel.

Next to that is the Navy building that is now completed at 250 feet tall.

To the South of the Navy building was a few smaller office buildings.

There was supposed to be a lot of ground floor retail space in those buildings along the waterfront side.

Here is a picture of the old plans:

As of late 2020 those building plans are now very different.

Adjacent to Broadway is now a big hotel, which is what the Manchester group does best.  I have not seen any height published on that building yet, but it appears to be less than the 400 feet of the old building on that site.  Im guessing in the 350 foot range.

All the other buildings are going to be bio tech offices and labs with some retail on the ground floor still.

The first of these buildings on the land where the old twin tower hotel was to go appear to be in the 300 foot height range from the images I’m seeing.  Don’t be fooled when you read the news say a building is only 15 stories or something.  Condo buildings are mostly 10 feet per floor.  Commercial buildings can vary a lot.  For example the Navy building is only 17 stories but its 250 feet tall.  So please don’t think if your on the 18^th floor in a near by condo you can look over a 17 story commercial building.  Easy assumption I hear a lot of Realtors incorrectly mention to their clients. 

It appears the building in front of the Navy building and to the South are still very low in comparison to the others.  The Port of San Diego has a general rule along the waterfront that says the tallest buildings are to be up next to Broadway and then slope down from there as you get further from Broadway the lower they get.  You can see that general rule in the design of the buildings on the North side of Broadway (West of Pacific Hwy, which is Port property).  The Intercontinental hotel is taller than the Marriott hotel which is taller than the Whyndham hotels. 

Here is a picture of the plan as of October 2020:

Well we have just completed the 3rd Quarter of 2020 and looking at the prices of condos in downtown San Diego it appears the worst of the impact of Covid 19 is behind us with prices rising just a little bit in the 3rd Qtr vs the 2nd Qtr when the lock down first started. 

Wow the condo owners in downtown San Diego had a great first quarter of 2020 with prices jumping up from a soft fourth quarter of 2019 for an annual gain of 5.7% over Q1 2019. 

Luxury condos, defined simply as those over 1,200 square feet, rose 15.8% over last 12 months.  The luxury market jumped up more because of some resales of the brand new Savina condominiums that were completed in mid 2019. 

This is some good momentum going into the second quarter of 2020 as the stay at home lock downs and the decline in the stock market will put some downward pressure on prices. 

Note this chart does not include brand new condos sold by developers as they do not report their sales through the MLS.  Prices in 2018 and 2019 would spike up on this chart dramatically if new sales were included for the two brand new buildings, Pacific Gate and Savina. 

I had the pleasure of discussing the transformation of Horton Plaza from a shopping mall to a high tech office complex known as The Campus at Horton Plaza as well as the redevelopment of Seaport Village and the newly opened Savina condos in downtown adjacent to Little Italy.

Click this link for video of Downtown New Public and Private Developments going on