Sale prices for San Diego County apartment properties jumped a record 35 percent last year, according to the Burnham Real Estate annual apartment report. The average price per unit climbed from $123,152 in 2003 to $166,153 by the end of last year.
The report identified the force behind the rising demand for apartment property as the “condo conversion craze” sweeping San Diego.
“Prices have reached an historically uncharted level, with condo converters paying nearly double what might otherwise be the value of an apartment project not suitable for conversion,” said George Carlson, a vice president focusing on apartment properties at Burnham, in a press release.
In the report, released April 18, Burnham classified sales of 100 or more units that sold for more than $100,000 per unit as “mega deals,” according to Carlson. In 2004, 82.5 percent of all sales transactions that involved five or more units (or 596 out of 722 sampled), exceeded $100,000 per unit. This is up from 58 percent in 2003.
This year, Burnham implemented a “super-mega” designator for projects with 100 or more units that are selling for $200,000 or more per unit. In 2004, Burnham classified 16 sales as “super-mega” involving a total of 5,246 units all located in the city of San Diego. Excluding these 16 sales, average apartment sale prices in the county only increased 31.2 percent, from $104,746 in 2003 to $137,394 in 2004.
The report also identified apartment price increases in sub-markets surrounding the city of San Diego: In Hillcrest/Mission Hills, prices increased 46 percent from $134,879 in 2003 to $197,131; in East San Diego, prices increased 41 percent from $86,289 in 2003 to $121,978; In the College area, prices increased 34 percent from $103,275 to $138, 174; In Chula Vista, prices increased 26 percent from $104,680 to $132,024; in Escondido, prices increased 26 percent from $99,006 to $124,571.
Burnham Real Estate is based in San Diego.