Jgnet Real Estate Blog

Those that are looking to find a downtown San Diego condos are going to find that the pickings are slim as the demand for these has increased to the point that there are hardly any of these condos available for purchase. And due to this demand, people that are looking for a condo are going to find that they are going to be paying much more for the condo than they were a year ago. During the first half of the year in 2011, the price that people were paying per square foot increased by around four percent when looking at what the price was during the same time period last year. With this trend, if it continues, by the end of 2011, the total increase in price per square foot could be an increase of around eight percent.

With that being said, those that are trying to sell their condo in the San Diego downtown area are not surprised when they put their condo on the market to get several offers within that same day. Thus, they can pick and choose which offers that they accept. Which does put to rest the talk that people are having a hard time in selling their home in San Diego, add into the fact that in San Diego the person will find that the weather is a welcoming sign for their new home and they are going to find that the market is actually better here than it is in other areas of the world. There are several condos in the area that are ten years old or younger, there is a low crime rate in the area, almost everything is in walking distance and the person will basically find that they feel as though they are on vacation at all times during the year. However, with the at being said since the condos are so sought after the supply of these condos have decreased to be around three percent of all the homes on the market. What does this mean for those that are interested in buying a condo for themselves? It means high competition and this is going to be even higher since there are not any new condos planned to be constructed until the Bosa Development constructs a new condo in 2015.

Those that are interested in these condos are going to find that there are several factors that are affecting the price of these homes. For one the location is one that is basically looked at as a vacation spot, thus they can expect to find the competition high. Interest rates, the requirements for down payments, local jobs availability and other aspects are affecting the price of these homes as well. However, in regard to San Diego, the unemployment rate is really not a factor since many people buy these condos as a place for retirements. In fact, around forty percent of all the condos purchased in 2011 were paid for with cash.

There are many factors that influence supply and the person will find that some of the top factors are the building permits that are allowed in the area, financing the construction, the cost of building and the availability of the land that is there to build on. For those that wonder if supply is really being affected when they consider these condos in San Diego they should simply take a look at the area of San Diego, there is very little land left that the builders can even build on. And because of this the city has strict rules in place for those that are trying to get building permits to build on the land in the area. Plus, the builder is also facing some very difficult terms on the loan to meet. Therefore, why it will be at least four years before people start to see new condos being built in the area.

For sellers, though this is welcoming news. They basically have no competition to compete with when they are ready to sell their condo. And this is going to remain the same way for the next five or seven years. The last condos that were put up in the city were built in 2009 by Bosa Development and it only took two years for all the condos to sell. However, in order to sell these, the company had to lower the asking price of the condos to compete with those that were selling their condo throughout the city. Basically, they ended up selling the homes for as much as twenty percent below the price that it took build them in order to move onto their next project. This is something that developers were monitoring closely as they do not want to find themselves in the same situation. Thus, before new condos are built, the price per square foot will have to increase by a few hundred dollars in order to cover the expense of actually building these condos, and to make some profit from building these. Therefore, it comes as no surprise that it may be as many as five or more years before we start seeing construction of these condos in the area.