April 13, 2016

The Mark Company Trend Sheets: March 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.

March trends in San Francisco indicate steady market conditions as the traditional selling season gains momentum and new product enters the market. Downtown Seattle condominium prices were unchanged from the previous month, remaining $786 per square foot compared to a peak of $853 per square foot set in January. Downtown Los Angeles prices rose just one percent from the month prior, but were four percent lower than last year.  Market conditions in Downtown San Diego have mixed indications due to a price decrease compared to the previous month. However, this follows four successive monthly increases and the lack of supply combined with a continuing strong demand for new construction should result in gradual increases in the months ahead.

March 2016 Highlights

San Francisco

The Condominium Pricing Index for San Francisco increased 2 percent to $1,263 per square foot in March, compared to $1,243 per square foot in February and $1,194 per square foot in January, indicating a return to moderate appreciation after several years of robust growth. Several developments are poised to commence sales later this year. The Harrison launched in early April with 298 units. There are currently approximately 633 new condominiums available for sale, compared to a peak of approximately 3,000 in 2007.

Downtown Los Angeles

The Condominium Pricing Index for Downtown Los Angeles increased 1 percent to $722 per square foot in March, compared to $717 per square foot in February and $701 per square foot in January. While the Index is now 4 percent lower compared to the same month last year, the uptick in pricing compares positively with the 10 percent year-over-year decline recorded in February. Metropolis and Ten50 remain the only currently selling new construction condominium developments in Downtown Los Angeles, with approximately 695 new units available for sale.

Downtown Seattle

While Downtown Seattle condominium pricing remained unchanged in March compared to February, this follows four months of successive increases, indicating stabilizing prices. Prices remained at $786 per square foot compared to a peak of $853 per square foot set in January of this year and are now 3 percent lower than the same month last year.  There are currently only 264 new condominiums available for sale, which is 37 percent fewer than the same month one year ago.

Downtown San Diego

Downtown San Diego condominium prices decreased 5 percent in March, but remain 10 percent higher year-over-year. The Condominium Pricing Index in March was $664 per square foot, edging down from $702 per square foot in February. Pacific Gate is the first new condominium development in Downtown San Diego since 2009 and remains the only new construction condominium development currently selling in Downtown San Diego.

“In San Francisco, there have been successive price increases every month for the first quarter of the year, and the incremental recovery in Los Angeles in February and March may indicate improving market conditions and stabilizing prices as the traditional selling season gains momentum,” said Erin Kennelly, senior director of research, The Mark Company.

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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