Condo Prices Up in Three Major West Coast Markets
By Dees Stribling, Contributing Writer
Condo prices increased significantly in the downtown Seattle, downtown Los Angeles, and San Francisco markets in December 2013 compared with the same month a year earlier, according to a recent report by the Mark Co., a San Francisco-based urban residential marketing specialist. The Mark Company Condominium Pricing Index for December was up 15 percent year-over-year in downtown Seattle, 18 percent in downtown Los Angeles, and 18 percent in San Francisco, though two of the three indexes edged down a little month-over-month.
“Each of the three markets has a unique story, but the common theme is extremely low inventory combined with improving economic conditions,” Erin Kennelly, senior director of research at the Mark Co., tells MHN. “Seattle, Los Angeles and San Francisco are all experiencing a shift toward demand for downtown condominiums. While the traditional reason to live downtown is to be closer to work, new condominium buyers today are more interested in the lifestyle made possible by living in the city center including proximity to entertainment, retail and restaurants.”
The Downtown Seattle Condominium Pricing Index was $687 per square foot, down 3 percent from November. New construction inventory in downtown Seattle was more than 400 percent higher than a year ago, with 321 units available.
“In Seattle, the economy is very strong but new supply has responded very slowly,” Kennelly notes. “Insignia, a new development by Bosa, is the first development of the post-crash generation to commence sales in downtown Seattle
For downtown Los Angeles, the company’s Condominium Pricing Index for December was $613 per square foot, down 2 percent from November. New construction inventory was more than 90 percent lower than a year ago, with only 12 units available.
In the case of LA, Kennelly explains, the economy is recovering slowly despite pockets of fast growth in the more affluent areas. “Condominium price appreciation is still strong, however, due to a lack of new condominiums in downtown Los Angeles,” he says. “Barker Block represents the only development under construction in downtown Los Angeles, and will bring only 68 new units to the market when it begins selling early this year.”
The December San Francisco Condominium Pricing Index was $1,034 per square foot, up 2 percent from November, the only one of the three to show month-over-month appreciation. New construction inventory in San Francisco was 78 percent lower than a year ago, and down 26 percent from the previous month, with 92 units currently available.
“In San Francisco, the local economy is red hot,” Kennelly says. “Prices would be even higher if the development community hadn’t responded with several hundred recently completed condominiums and several thousand new apartments.”