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

Looking for that rare extra large outdoor space in a downtown condo building.   Check out this 20 feet by 12 feet private terrace in the Savina condos. 

Savina is a prestigious address you will be proud of. Arrive in style at your sophisticated condo in the brand new luxurious Savina in prime location, in the heart of San Diego.  You will be part of a lavish life style as you enter the stylish lobby before taking the elevator up to your 4th floor condo. An open floor plan with hardwood floors lures you inside and the natural light from the immense ten foot high living room windows beckons you over to discover your view is not only of the gorgeous city, but also peak view of the San Diego Bay and Star of India.  You will have the pleasure of entertaining on your own private foot terrace as well as enjoying the pool, BBQ's and fitness center which are on the same floor down the hall from your residence.  Call me for pricing and a tour.

We all love brand new condos, have you heard about the Savina condos in downtown San Diego steps from all the Little Italy restaurants?  Take a close look at a rarely avaible floor plan, residence #2303, this unit has panoramic views of the bay and city skyline. 

Picture yourself cooking up memorable meals in the contemporary kitchen adorned with wood veneer cabinetry, stylish backsplash, and under cabinet lighting. Beyond all that, you will enjoy the top of the line stainless steel appliances and an overall redefined lifestyle only a select few can experience. The two bedrooms offer generous space, style and million-dollar city views from each window. The master suite includes a sizeable walk-in closet bathroom that includes dual sinks and a spacious walk-in shower for the utmost relaxation after a long day. Enjoy even more picturesque views from your private balcony while sipping your favorite wine and enjoying the sunset, or perhaps with a cup of coffee in the morning.

The resort style amenities at Savina condos include:

Attended lobby with custom chandelier, rich wood millwork and lounge seating

Stylish and comfortably appointed business lounge

Expansive landscaped pool terrace with spa, pool, cabanas and fireplace

Outdoor dining areas for communal grilling and gathering

Spa retreat with steam room, sauna and swing loungers

Light-filled fitness center with high ceilings and outdoor yoga terrace

Social lounge with chef-par kitchen, billiards and spacious outdoor dining and entertaining veranda

High-speed WiFi in all common areas

Onsite storage for residents

Gated resident parking with communal electric car charging stations

Bicycle storage and tune-up station

Dedicated pet grooming area and outdoor retreat

Building, amenity and elevator private access

Convenient ground floor retail

Click here for more photos of residence #2303 in Savina

Prices of condos in the downtown San Diego market have stabilized after weakness in the resale market due to competition from two new condo towers, Pacific Gate and Savina.  In the chart below you will see prices in the resale market started to soften in fall of 2018 as a lot of buyers chose the brand new buildings over even the newest of resales which is now 10 years old.   

You will love the panoramic bay views from the living room AND both bedrooms in this 1,811 sf Bayside condo, not in the MLS, individuals and Brokers call me if any interest.   Condo shoppers note this is about the only building I can walk a buyer into and not have them say it needs updating like so many other condo buildings in downtown.  This is the second newest condo building in downtown San Diego.