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Apartment Market Slows

San Diego County’s apartment market continues to slow, reflecting the difference in the expectations of sellers and the requirements of buyers, according to a report released Nov. 21 by Burnham Real Estate.

The slowing follows two years of record pricing and sales, driven by condo conversions.

“Pricing for San Diego apartment properties became distorted as condominium converters paid unprecedented amounts in anticipation of profits from the sale of converted units,” said George Carlson, vice president and apartment specialist with Burnham Real Estate. “The drop in sales for seven consecutive quarters shows a correction as investors continue to price the units as conventional apartments.”

Carlson advised patience.

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“Historically, market corrections are followed by significant decreases in selling prices, but not immediately,” he said. “It’s too soon for quarterly averages to reflect a major drop in pricing, but we can expect to see this in the near future.”

Some tidbits:

– Year to date, apartment transactions decreased 34.8 percent, while units sold dipped by more than 26 percent.

– There were five major deals in the third quarter, involving 100 units or more: Villa Dorado in Mission Valley, 668 units, sold for $182.5 million; College Manor in the College Area, 179 units, $37.5 million; Oakwood Apartments in Mission Valley, 170 units, $32.8 million; Colonnade at Fletcher Hills in El Cajon, 138 units, $19.5 million; and Mesa Garden Apartments in Vista, 124 units, $16 million.

– Leading San Diego County in third-quarter transactions was Normal Heights/Kensington/University Heights with 20 sales of 188 units; Golden Hill/Southeast San Diego, 19 sales of 104 units; followed by Inland North, 16 sales of 250 units; and North Park, 14 sales of 72 units.

, Pat Broderick

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