Downtown real estate market: slow and steady for now
by Hillary Schuler-Jones
Aug 05, 2010 | 1192 views | 0 0 comments | 6 6 recommendations | email to a friend | print
Gregg Neuman
Gregg Neuman
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San Diego’s downtown area has been transformed by extensive redevelopment in the last decade, creating an environment that has attracted homebuyers from across the globe. But for all the benefits of living downtown — ocean-view homes, a thriving hospitality district and the tantalizing buzz and bustle of urban life — the area has suffered from the same plummeting sale prices, high foreclosure rates and surplus inventory that have plagued the rest of the nation since the real estate bubble burst.

There are some indicators, however, that the area is on the verge of a recovery.

Gregg Neuman, a San Diego Realtor who was Prudential’s top-selling agent in Southern California for the first half of this year, said homes priced at less than $500,000 all around the county are selling more quickly, which is helping to stabilize a volatile marketplace. In the 92101 ZIP Code, 442 homes were sold between January and June 2010, an increase of more than 28 percent from the same period last year, he said, and there are other factors that indicate San Diego is gaining traction.

“I’m seeing that the builders are starting to move forward in planning for future developments that will be coming online in a couple of years, and that is probably the best barometer of all, because … developers make a conscious financial decision whether they are going to move forward or not, and they have to feel comfortable enough that there’s going to be a profit and a buyer for their product at the end of the day,” Neuman said.

Carl Iseman of Abbott Real Estate Group said she is seeing more interest from serious buyers, who are turning up at her office more frequently and attending more open houses. She is hopeful that changes in the pipeline for downtown, like the new Central Library, the rumored Chargers Stadium and the proposed Civic Center, bode well for the real-estate market in the long term. In the short-term, however, it is still comes down to money.

“A lot is going to depend on the global economy. I think we are affected not only locally but globally, because we do have a lot of people that are looking to locate in San Diego, but what they can buy and where they are going to locate is going to depend on the economy, if they are going to come at all,” Iseman said.

Neuman and Iseman both said it will take a recovery at the lower end of the price spectrum to spark momentum throughout the rest of the market.

Realtors Ann LeBaron and Dale Bowen, who specialize in luxury condominiums downtown, agreed there are positive signs of a turnaround for homes on the lower end, but said home sales over the million-dollar mark will remain sluggish for the foreseeable future. Still, they are encouraged by a trend in retirees taking their money out of stocks and putting it in real estate, which indicates a shift in confidence.

“We talk a lot about what would drive buyers to buy right now, and in the last couple of months, we’ve seen people pulling out of the stock market because they are tired of seeing it go up and down, so they are paying cash for large transactions,” LeBaron said. “They might as well, because they aren’t making any money off of it in the stock market or in the bank, and interest rates are not going to go up in the near future.”

That shift, combined with market stabilization, may be enough to create momentum for luxury condos moving into next year.

“There is always a market for something if it is well priced and if it shows well, and I think in the outliers, people have adjusted their prices. So as they sell, it creates buyers in our market,” LeBaron said.
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