February 22, 2016

The Mark Company Trend Sheets: January 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.

After an exceptional 2015 marked by low inventory, record-setting prices and ample demand across urban real estate markets on the West Coast, January 2016 started off strong with month-over-month pricing increases in Downtown Seattle and Downtown San Diego. Year-over-year increases ranged from a modest 2 percent in San Francisco to 21 percent in Downtown San Diego.

January 2016 Highlights

San Francisco

The Condominium Pricing Index for San Francisco fell for the fifth consecutive month to $1,194 per square foot. However, contract activity at new developments has been very strong, indicating that recorded closed sales figures for February and March will reflect improving market conditions. There are approximately 655 new condominiums for sale today and another 1,200 set to hit the market during the first half of this year.

Downtown Los Angeles

The Condominium Pricing Index for Downtown Los Angeles decreased sharply in January to $701 per square foot. This marked a decline of 13 percent from December and 12 percent from last January. While prices may recover in February and March, last month’s decline indicates that the market for new construction may be weaker than the last several years of strong appreciation.

Downtown Seattle

The Condominium Pricing Index for Downtown Seattle increased 2 percent in January following three months of successive increases. The new peak of $853 per square marked a 17 percent increase from the same month one year ago. New construction remains very low at fewer than 350 available units.

Downtown San Diego

The Condominium Pricing Index for Downtown San Diego increased 5 percent in January to $691 per square foot, which is 21 percent higher than one year ago. There are no new condominiums currently available for sale in Downtown San Diego, although rental units at Aloft in Cortez Hill are now being offered for sale as they become available. Bosa’s Pacific Gate with 216 units remains the only condominium development currently under construction and is the first new condominium development in Downtown San Diego since 2009.

“The increase in year-over-year pricing for new construction in Downtown Seattle, Downtown San Diego, and San Francisco is a reflection of strong real estate market fundamentals and ample demand for quality housing in urban cores,” said Erin Kennelly, Senior Director of Research, The Mark Company. “The decline in prices for new construction in Downtown Los Angeles may indicate a cyclical shift that will require new strategies for success in order to capitalize on opportunities in the current market.”

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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