Downtown San Diego condo prices jump 6.5% in July 2007 over the prior month. July data is also promising in that the prices were 2.0% over the average of the first six months of 2007. The figures above represent the very accurate data of cost per square foot, not the median as often reported by main stream media that has limited data. Year to date through July the number of units sold is flat from 2006 levels at just over 380 units.

One reason for the increase in prices 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 due to tighter lending standards and the fallout of having a larger than average number of these buyers getting out of apartments and buying in the past few years when the teaser interest rates were available.

The volume of condos sold in July was up slightly to 55 from June volume of 52. Year to date the number of downtown condos sold in San Diego is 391, compared to 393 during the same period of 2006. Year to date through July of 2007, the average sold costs per square foot of a downtown condo was down 9.7% from the same period in 2006. The sold costs per square foot is expected to rise in the future due 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 expect more cancellation or postponement of new condo projects 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 condo projects that were scheduled to be built will instead be built as hotels. Even the tallest residential tower planned is in talks with hotel developers. There is one big reason driving the hotel trend, lack of hotel rooms downtown and 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 second class locations, too many competing resales in the best locations.