The Mark Company Trend Sheets: June 2016
The Mark Company tracks real estate trends in the West Coast’s urban markets. Our Trend Sheets track sales, pricing and inventory for new condominiums, providing critical month-over-month and year-over-year comparisons.
Downtown Seattle showed the strongest year-over-year increase of 7 percent during June, while San Francisco and Downtown San Diego both declined modestly by 2 percent and 1 percent, respectively. Downtown Los Angeles experienced a strong uptick in resales pricing, possibly due to the large pricing differential between new construction and resale product. Overall trends indicate a slight slow down as we enter the heat of summer.
June 2016 Highlights
The Condominium Pricing Index for San Francisco was $1,271 per square foot in June. This marked a 3 percent decrease from May and 2 percent decrease compared to the same month last year. There were approximately 1,195 new construction condominiums available for sale in San Francisco at the end of month, which was a 43 percent increase from the previous month, but well below the high of over 3,000 units reached in 2007. It is estimated that just 32 new construction condominiums were put into contract during June, marking a 66 percent decrease from the same month last year. Inventory is anticipated to increase during the remainder of 2016, with several new developments slated to commence sales later this year.
Downtown Los Angeles
The Condominium Pricing Index for Downtown Los Angeles decreased 2 percent in June after several months of increases. The Condominium Pricing Index for Downtown Los Angeles currently stands at $769 per square foot and is now 1 percent higher than the same month one year ago. New construction condominium sales appeared to have stalled in June, as approximately 5 units were placed into contract. Resale condominium prices increased sharply last month. The average price per square foot for units sold in June was $692, representing an increase of 6 percent compared to the previous month and 27 percent compared to the same month one year ago. Average resale prices can vary widely from month to month due to shifts in the mix of units sold. Resale inventory remains relatively low. There are currently 120 active resale listings in Downtown Los Angeles, representing four months of inventory. Six months is considered the equilibrium between a buyer’s and a seller’s market
Despite a 2 percent decrease last month, the Downtown Seattle Condominium Pricing remains 7 percent higher than the same month one year ago. New construction inventory rose sharply compared to last month due to the addition of 374 units at Nexus, a new condominium development located at 1200 Howell Street. The average price for a resale condominium decreased by 1 percent last month, but remains 3 percent higher than the same month one year ago. Resale inventory is extremely low. There are currently 70 active resale listings in Downtown Seattle, representing only 1.3 months of inventory.
Downtown San Diego
The Downtown San Diego Condominium Pricing Index increased by 1 percent last month, and is now 1 percent lower than the same month one year ago. Aside from a brief increase to slightly more than $700 per square foot in February, the Index has remained very stable in the mid $600s per square foot since the beginning of the year. The average resale price per square foot increased by 6 percent last month, but remains 4 percent lower than the same month one year ago. Resale inventory is very low, with only 2.1 months of supply currently available.
The Condominium Pricing Index, part of The Mark Company’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 a proprietary quantitative method to measure trends in market demand. It tracks the value of a new construction condominium without the volatility of inventory changes.
The Mark Company provides our developer clients with the tools, guidance and strategies they need to outperform the competition. Our detailed Monthly Reports and Trend Sheets deliver an accurate snapshot into the competitive landscape of key real estate markets throughout the Western United States, bringing to life the market and buyer trends that inform future strategy.
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About The Mark Company
The Mark Company is one of the nation’s premier urban residential marketing and sales firms. Founded by Alan Mark in 1997, The Mark Company provides a full range of core consulting services including analytics, design, marketing and sales for urban high-rises and suburban attached properties throughout the Western United States. The firm is a trusted partner to global leaders in residential development and finance, providing buyer-driven sales and marketing strategies that produce industry-leading results. The Mark Company has represented more than 10,000 residences and generated over $5 billion in sales for some of the nation’s most notable and successful developments including The Infinity in San Francisco, Evo in Los Angeles and The Martin in Las Vegas. Current projects include 181 Fremont Residences and The Harrison in San Francisco and Cavalleri in Malibu. A subsidiary of Pacific Union International, one of the San Francisco Bay Area’s top-performing resale brokerages, The Mark Company benefits from an enriched leadership team, enhanced technology and added global reach through its affiliation with Christie’s International. For more information, please visit www.themarkcompany.com.