Condo Prices in Three Major Cities Saw Notable Increases
- Sep 17, 2015
By Andie Lowenstein, Associate Editor
San Francisco—Three major cities saw condominium price increases this month, while one saw decreases.
San Francisco, Downtown Los Angeles and Downtown Seattle all saw increases in August, while Downtown San Diego saw decreases compared to the previous month. All four markets maintained year-over-year price increases, according to The Mark Company, an urban residential marketing and sales firm.
In San Francisco, The Mark Company Condominium Pricing Index for August was a record $1,340 per square foot, marking a 4 percent increase from the previous month and climbing 20 percent compared to the same month last year. New construction absorption was 39 percent lower than the previous month and 12 percent less than the same month one year ago. However, it’s not unusual to see a slowdown in absorption in late summer.
Downtown Los Angeles Condo Pricing Index for July was $772 per square foot, a small jump of 2 percent from the previous month and 11 percent higher than one year ago. Metropolis remains the only new construction development offering units for sale in Downtown Los Angeles. The Title Guarantee Building will soon begin sales in September, offering 74 apartments as converted condominiums. Additional large developments in the pipeline include Oceanwide Plaza with 504 units and Ten 50 with 151 units, along with future phases of Metropolis.
Downtown Seattle’s new condo prices greatly jumped in August, rising 5 percent to $794 per square foot, and is now 13 percent higher compared to August 2014. New construction absorption was also positive, rising 73 percent since last month with 45 units sold in August.
New construction inventory stands at 331 units, most of which are at Insignia with 186 units and Luma with 141 units now available. Average resale condo prices decreased by 3 percent last month to $613 per square foot but linger at 7 percent higher than August 2014. There were a total of 28 resales in August.
The Downtown San Diego Condominium Pricing Index decreased 2 percent in August from the previous month to $644 per square foot but rose 3 percent compared to August 2014. There have not been newly completed condos in San Diego since the last recession.
Bosa Development’s next offering, recently named Pacific Gate, will be Downtown San Diego’s first new condo development since its previous development Bayside at the Embarcadero in 2009. On the flip side, apartment construction has been vigorous with nearly 2,000 new apartments currently under construction.
“Resale condominium inventory remained relatively low in San Francisco with one month of inventory, Downtown Los Angeles with 2.4 months of inventory, and Downtown Seattle with 2.3 months of inventory, while slightly higher in Downtown San Diego with 4.8 months of inventory,” said Erin Kennelly, senior director of research, The Mark Company. Six months inventory represents the balance between a buyer’s and seller’s market.
”Positive employment gains and low mortgage interest rates continue to impact the housing market, and overall market conditions remain strong,” noted Kennelly.
The Condominium Pricing Index, part of the firm’s monthly Trend Sheet, represents the price per square foot of a new 10th floor, 1,000-square-foot condominium. It is based on recent sales data and uses an exclusive quantitative method to measure trends in market demand. The index tracks the value of a new construction condominium without the instability of inventory changes.