The prices for the condos in San Diego, especially downtown, jump 6.5% in July 2007 over the prior month. The figures above represent the accurate data of cost per square foot and not the median. One reason for the increase in prices, for the condos in San Diego, is that more of the higher end units are selling versus the lower priced condos. The volume of first time buyers or entry (price) level buyers has dropped significantly compared to prior years. This is the result of tighter lending standards. Also a larger than average number of the buyers got out of apartments and bought in the past few years when the teaser interest rates were available. Year to date through July of 2007, the average sold costs per square foot of a downtown condo in San Diego was down 9.7% from the same period in 2006.
The sold costs per square foot is expected to rise in the future as a result to the slow down of the low end of the price range and more sales occurring at the upper end of the price spectrum. As the year progresses more cancellations or postponements of new projects for condos in San Diego are expected, due to several factors including the credit crunch and softening sales prices. The trend in new development downtown now is not condos, but hotels. A few projects for condos in San Diego that were scheduled to be built will instead be built as hotels. There is one big reason driving the hotel trend lack of hotel rooms downtown San Diego. Also the remaining lots to build on are not premium lots therefore with the increased costs of building a high rise condo they can not sell high priced condos in San Diego in second class locations.
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