The downtown skyline is full of cranes and one might think the new construction condo market is booming. However, most of these cranes are actually for apartment buildings (rentals) and just two new construction condo projects are currently underway in downtown San Diego.
If you are wondering why, here is my take on it. The population of Downtown San Diego is booming with Millennials relocating here from all around the country. A big part of this highly influential demographic group still cannot afford to purchase, at least in this market. Everywhere you go in downtown the two most prominent groups of residents is always very well defined in two distinct demographic groups, millennials and retired baby boomers. The rest of the market belongs to second home owners and foreign buyers, I say about a third of the market is comprised of part time residents and many of those units sit vacant almost year round.
Millennials are still having a hard time buying in downtown San Diego due to tight lending guidelines and high prices many cannot afford to purchase. Therefore they rent and the demand of rentals is extremely high pushing prices up and motivating real estate investment groups to build more and more rental buildings. The downtown market is getting flooded with apartment rentals and no new condos. The total resale condo inventory today for the downtown zip code of 92101 was 163 units available for sale which is very low.
The bottom line is that we need more new construction condos and I think developers are missing out as there are buyers but no inventory to match them with.
Going back on topic, Pacific Gate which is one of the only two new construction condo projects in downtown San Diego is coming up very nicely and looks quite impressive.
The building should be completed by December 2017 and is now about 40% sold. We compiled a brief video below showing the construction progress. We placed a few clients in the building and have detailed information on this project. Please contact us for more info as lots of public and private redevelopment projects are going on around Pacific Gate.
More info on Pacific Gate Downtown San Diego.
The other new construction project, also by BOSA, is Kettner and Ash. Click here for more information on Kettner and Ash Condos.
Pacific Gate Construction Progress Video
New Construction Condo Interest List