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Not yet to 2005 level

Downtown residential condominium prices steadily moving up

It's nice to work in downtown San Diego, according to brokers who say residential condominium price increases have been strong within the past three years.

Michael Long, a Realtor with ARG Realty in downtown San Diego, said he sold the same unit in Intergulf's Treo development at 1240 India St. for considerably more the second time around.

The unit, which has two bedrooms and a den in 1,253 square feet, sold for $429,000 in February 2012 and for $527,500 in March of this year.

Chad Dannecker, broker of the Welcome to San Diego Real Estate firm, said he handled the sale of the same unit in the 232-unit Bayside condominiumat 1325 Pacific Highway in the Embarcadero in January 2011 and in May 2014.

The two-bedroom, 1,462-square-foot, two-bath unit developed by Vancouver-based Bosa Development sold for $645,000 in 2011 and $835,000 last May.

"And except for paint, he didn't make any improvements," Dannecker said.

Prices may vary amongt same-sized units, depending on where they are on a property and other factors.

Still, two Mark Co. reports also seem to show a marked increase in prices since 2010.

In May 2010, a two-bedroom, two-bath unit of 1,196 square feet at Bayside sold for $570,000. A unit of the same size and number of bedrooms count for $720,000 in June of 2014.

In May 2010, a one-bedroom, one-bath, 904-square-foot unit at Centurion Real Estate's Sapphire Tower sold for $465,000. A comparable unit sold for $562,000 in September 2013.

Another Sapphire Tower unit with two bedrooms and two baths in 1,949 square feet sold for $1.02 million in May 2010. A comparable floor plan sold for $1.25 million in December 2013.

Lankford & Associates' 301-unit Smart Corner development was one of numerous developments affected by the recession.

As a result, when units weren't selling they were rented out. By the spring of 2010, however, the sales program was back in full force and the all the units were eventually sold.

A 472-square-foot studio unit sold for $150,750 in May 2010. A similarly-sized unit resold for $230,000 May 2014.

Downtown condominiums prices appear to be climbing for one simple reason -- few are under construction.

The only planned major downtown tower in the works is the 41-story, approximately 230-unit condominium project by Vancouver-based Bosa Development at Broadway and Pacific Highway. Bosa is awaiting the right time to start.

Although nearly 2,000 condominium units are in the long-term pipeline, the remaining major projects, representing more than 3,000 units, are apartments. Each will have condominium maps for possible conversion.

Realtors and brokers who were interviewed acknowledged increased activity.

Nelson White, a broker branch manager of Berkshire Hathaway California Properties in San Diego, said he has placed a couple of Bayside units into escrow, each priced at more than $1 million.

One of these is a two-story townhouse on Bayside's ground floor, which that is in escrow for about $1.2 million.

Stephen Clark, a broker associate at Pacific Sotheby's International Realty, also related that another Bayside unit sold for $2 million within the past few weeks,

Bayside's largest recent sale was of a 3,226-square-foot, two-bedroom 2 1/2-bath unit that sold for some $3.29 million in April.

White said his brokerage has 28 downtown San Diego condos in escrow in multiple properties at present.

"Sales are definitely improving. Buyers are coming out of the woodwork," he said.

White said he has handled two escrows each in Bosa's The Grand, Bosa's Electra and at Pinnacle Market Development's The Pinnacle.

White said while the prices aren't back to what they were in 2005, he wouldn't want them to be back up there.

"I don't think we'll see those double-digit increases," White said. "We have still have great loan rates, improving inventory and good prices for a steady market."

Clark said that inventory is an issue with his firm, adding, "The inventory is very limited in downtown San Diego."

Long said with an estimated 600 units on the market, "you could have had the pick of the litter" in 2010.

By 2012, Long said the inventory had gotten down to 140 units. Today the figure is 284 available condominium units downtown. "It's much more balanced today," Long added.

Clark said the good news is foreclosures are gone, and prices have climbed substantially, though not quite back up to where they were before the recession.

The problem, Clark said, is that some sellers still expec to get what they may have received before the recession began.

"Some sellers are greedy," Clark said.

The new Bosa tower, meanwhile -- which could get underway next year -- is planned to feature 16,000 square feet of retail, along with its 232 units in 956- to 2,083-square-foot, one- three-bedroom configurations.

Amenities will include a fitness center, second-floor garden area, fourth-floor pool deck and outdoor roof deck on the 41st floor.

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