May 12, 2016

The Mark Company Trend Sheets: April 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.

Pricing in San Francisco, Downtown Los Angeles and Downtown Seattle all trended upward during April, with Downtown San Diego the only market to experience a slight decrease. Despite the 3 percent decrease to the Downtown San Diego Condominium Pricing Index, strong absorption at Pacific Gate exemplified ample buyer demand for new construction product in a market with just one development actively selling.

With year-over-year pricing increases in all four markets, trends indicate steady stabilization of pricing supported by continuing employment growth, strong demand for housing in urban centers and positive economic climate.

April 2016 Highlights

San Francisco

The Condominium Pricing Index for San Francisco increased 3 percent to $1,303 per square foot in April, steadily edging up from $1,263 per square foot in March, $1,243 per square foot in February and $1,194 per square foot in January. With the recent addition of The Harrison with 298 units, there are now approximately 889 new construction condominiums available for sale in San Francisco, which is a 40 percent increase from the previous month, but well below the high of over 3,000 units reached in 2007. 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 increased 8 percent in April, marking the third consecutive monthly increase this year, indicating a stabilizing market driven by positive real estate fundamentals, continued demand and tightening available inventory. The Condominium Pricing Index for Downtown Los Angeles currently stands at $780 per square foot and is now 5 percent higher than the same month one year ago, comparing positively to the 4 percent lower year-over-year pricing recorded in March.

Downtown Seattle

Downtown Seattle condominium prices increased by 2 percent in April over the previous month, now standing at $801 per square foot, compared to a peak of $853 per square foot set in January of this year. Pricing increased in April after remaining unchanged in March and following four months of successive increases. As Insignia approaches sellout, inventory in Downtown Seattle is very low. There are currently only 239 new construction condominiums for sale, a decrease of 9 percent compared to March, and 54 percent lower than the same month one year ago.

Downtown San Diego

Downtown San Diego condominium prices decreased 3 percent in April following a 5 percent decrease in March. The Condominium Pricing Index in April was $643 per square foot, declining from $664 per square foot in March, however this follows four successive monthly price increases. The price decrease in April may be the result of new units now being offered to the public at Pacific Gate. However Pacific Gate, the only currently selling new construction development in San Diego, has experienced very strong absorption, with approximately 70 units sold to date at reported list prices of approximately $1,000 per square foot.

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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