Condo Prices Edge Down in Pricey West Coast Markets

New condo prices edged down in one notoriously expensive market.

San Francisco–New condo prices edged down in May in one notoriously expensive market, according to a new report by the Mark Co.—namely San Francisco—and two fairly high-priced ones: downtown Seattle and downtown Los Angeles. Even so, San Francisco and downtown LA recorded year-over-year price increases, while downtown Seattle was unchanged, the company noted.

The Mark Co., which is based in San Francisco, compiles condo price indexes for these markets as part of its monthly Trend Sheet. It’s based on recent sales data, and uses a proprietary quantitative method to measure trends in market demand.

According to the company, its index tracks the value of a new construction condo without the volatility of inventory changes.

The company’s San Francisco Condominium Pricing Index for May was $1,263 per square foot, a drop of 2 percent from last month, but 12 percent higher than the same month a year ago. New construction inventory decreased 14 percent from last month, while still 99 percent higher than one year ago—in effect doubling over the course of the year, indicating that developers are eager for a piece of the action in this high-priced market. There were about 148 new condos placed into contract in May, with about 810 new condo units now available for sale in San Francisco.

Another expensive market, downtown Seattle, had a Condominium Pricing Index for May that came in at $771 per square foot, marking a decrease of 2 percent from the previous month; there was no change compared with 2014. New construction inventory in the market declined by 6 percent last month, but remains a whopping 123 percent higher—more than double—compared with last year. There are 489 new construction condos currently available in downtown Seattle, nearly all of which are contained in two projects: the North Tower at Insignia with 357 units, and Luma with 168 units.

The Downtown Los Angeles Pricing Index for May was $739 per square foot, marking a 1 percent decline from last month and the third monthly decline. Despite the recent drop, the Index remained 10 percent higher than the same period last year. New construction inventory was unchanged from last month, but about 1,622 percent higher than one year ago. (In short, there was almost nothing going on then, and now there is.) There are about 155 new condominiums available in Downtown Los Angeles, all within the first phase of Metropolis, a new development under construction in the South Park neighborhood.