Condo Prices Balloon in Seattle, LA, SF
- Apr 09, 2014
San Francisco—Condominium prices increased in downtown Los Angeles, San Francisco and especially downtown Seattle in March 2014 over the previous year, according to Condominium Pricing Indexes released recently by The Mark Co. for each market. The increases were as follows: 8 percent year-over-year in downtown Los Angeles, 13 percent in San Francisco and 18 percent in downtown Seattle.
The indexes represent the price per square foot of a new 10th-floor, 1,000-square-foot condo in each of the respective cities. The figure is based on recent sales data, and uses a proprietary quantitative method to measure trends in market demand. The idea is to track the value of a new-construction condo without the volatility of inventory changes.
The San Francisco-based company tracks new-construction inventories as well. According to Erin Kennelly, Mark Co. senior director of research, new construction inventory remains low in all of these markets, especially when compared with historical levels. For example, in 2007 available new inventory in San Francisco peaked at nearly 3,000 units, versus 138 in March 2014.
The company’s San Francisco Condominium Pricing Index for March was $1,030 per square foot, unchanged from February. New construction inventory in San Francisco was 35 percent lower than a year ago (with the aforementioned 138 units available).
As for downtown Seattle, its Condominium Pricing Index was $727 per square foot in March, which is up 6 percent from February. New construction inventory in downtown Seattle was more than 950 percent higher than a year ago—development has clearly been brisk—but down 10 percent from the previous month, with 263 units available.
In downtown Los Angeles, the Condominium Pricing Index for March was $656 per square foot, which is up 6 percent from February. New construction inventory was 82 percent lower than a year ago, and down more than 50 percent from the previous month.
The Mark Co. also publishes a Penthouse Pricing Index, which applies the same methodology to a new 30th-floor, 2,000-square-foot condo (1,000 square feet in downtown LA). The Penthouse Pricing Index was $1,061 per square foot in downtown Los Angeles in March, up 8 percent year over year; $1,768 per square foot in San Francisco, up 13 percent from last year; and $1,124 per square foot in downtown Seattle, up 18 percent year over year.