A lot is being said of the distressed property market. Of course there is, it is national news. San Diego County is considered a distressed market according to a number of lending guidelines now as well. But what are the “markets within the market”?

 There are a few categories here:

                    (a)New construction-directly from the builder

                    (b)Resale market-individual seller/homeowner

                     (c)Distressed market with subcategory of Short Sale and Foreclosure

 The new home market, or buying directly from the developer, is a great way to go. They tend to have deeper pockets and there are ways to negotiate with them that will greatly benefit you. Having worked in the field of new home sales for a number of years, I am quite familiar with the process and have a good understanding of how the developers mind works. Translation, succesful negotiations that get you a great deal.

 The resale market or buying from an individual seller/homeowner is a different market all together. Here, you are typically negotiating on price only. Most individual sellers in our current downtown San Diego market are backed up against their equity. There are a few that aren’t but the majority are and don’t have a lot of negotiating room. It could ultimately come down to them bringing thousands of dollars into escrow to close a deal or just going the way of the short sale or cancelling the listing. Most of the time it is not a distress situation, comps form short sale/foreclosure transactions aren’t viable to the seller. That is something important to keep in mind. Dealing with an individual seller is dealing with emotion. Take those words to heart.

 The distressed market I have in two sub categories. It could always grow to more but for now I have two. Short Sale and Foreclosure.

 The Short Sale, it does not mean it is going to happen in a short amount of time. It does not mean negotiations will be short. It means the property is being sold short of what is owed on it. For example, a home that has a $400K loan out on it being sold for $375K is being sold short of what is owed on it. At this point, you are no longer dealing with the owner of the home, who still owns the home but has got the bank to agree to a short sale at a price that the BANK will approve. Not the seller of the home. You begin to take the emotion out of it here. You are going purely for a below market price on a home. A lot of them are still in decent condition as well. The time it takes for these transactions is much longer than normal. You can submit an offer- even at or above the asing price- and you may not get a response for a month or more. How much time do yo have?

 The foreclosure is different. The former owner no longer has it. It had gone into default and the bank excersized their right to take foreclosure upon the property. As banks can’t hold title property, it will be held in title under a trust. Again, you will see multiple offers and it can take a little longer. A lot of foreclosed homes look like a tornado went through them. Appliances wil have been removed and sold, and the transaction will be done “as is” meaning they don’t give a rip about an inspection or any request for repairs. They will laugh at it while they deplete the ozone layer with an aerosol can and wear coats made out of really cute animals. A weird visual, probably not that accurate. Most of the things in the home may have been stripped out and sold to recoop any monies being lost.

 As for the tax implications on Short Sales or Foreclosures… consult your tax person. I won’t and can’t give tax advise.

Are you new to downtown? How about old to downtown? Either way, you will probably notice that downtown San Diego is a piece of clay waiting to be molded into something awesome. I am talking about creating a scene, man! A movement! Not a riot, let me be clear on that. I am talking about finding your passion and turn it into a downtown event. Whether it be yearly, monthly or weekly make it happen. Be the founding person of something that wil be going on twenty years from now. Nurture your idea from infancy into full blown adulthood!

Here are some ideas:

 Like to run? Form a runners club. Call it the Urban Cruisers. Do runs weekly and organize a yearly event.

 Like to walk? Form a walking guild. Have babies? Form a Mother’s club that gets together at Petco or somewhere and get to know the other mothers/fathers. Bike riding clubs, book clubs, chess clubs. Start up a dinner club with other retaurant fanatics that can check out a downtown establishment once a month. We did it in my building. A great way to meet your neighbors and network. Take the initiative to start something and see it through!

 There is a music scene budding! It needs your support. Every Friday, Java Jones has live music- and it’s free! A lot of talent goes through there. Mondo Gelato has music every Thursday night- FREE! Get out and support it by listening.

 Be active in your neighborhood. Downtown San Diego should be a community of doers, not talkers. Which one are you? Ask yourself seriously… am I doing what I say? Am I part of something great? In twenty years, will you be a founding member, the great idea, the reason that culture, art, music and activity is a solid part of the downtown San Diego lifestyle or will you have just been sitting around wondering what happenned.

 I remember when I was in Middle School my Dad told me “there are three kinds of people in this world… those that make things happen, those that watch things happen and those that wonder what happenned.” Be the first two. Make something happen and support the other things going on.

 Let’s make our Downtown Awesome!

This graph shows the total number of Feburary sales for 2008 by complex.  These are the only downtown San Diego complexes that sold in the month of February, and they are ALL new construction.  Electra is downtown’s newest residential high-rise with top-of-the-line amenities and a prime waterfront location.

This graph shows the total February 2008 Sales by type of sales.  There are three markets downtown: New Construction, Resale, and Foreclousures/Shortsales.  These statistics show that New Construction/Developer deals were the only units to sell this past month.  Developers have the ability to offer deals such as HOA dues paid for a period of time, money toward upgrades, and more.  These are where the deals are at right now.  Many think that foreclosures and shortsales are the route to take, however, foreclosures and shortsales often take a great deal of time and jumping through hoops to get anything closed.  Also, many of these units need a lot of work.  The time and the money put into these deals often are not worth it.

Since 2000, downtown San Diego has seen the development of two major office buildings, more than 6,000 new condominium units, 3,000 new apartment units and 3,700 hotel rooms, and, of course, Petco Park, the key anchor of the East Village…

Today, there are more than 30,000 persons living downtown and more than 75,000 persons working downtown.

Until the year 2000, the total number of condominiums and rental units downtown totaled 8,303. Of that total, there were 1,311 condominiums and 1,812 market-rate rental apartments. The balance were senior, single-room occupancy and subsidized units.

Since 2000, there have been 77 projects built and occupied downtown. Of those, 46 were condominium projects totaling 6,421 units along with 21 renter apartment projects totaling 1,482 units. In total, more than 9,000 unit have been built downtown since 2000.

Now the downtown San Diego area has more than 17,000 housing units, including 7,732 condominiums and 3,294 market-rate aprtments. Thus, in the past seven years, the number of living units downtown has more than doubled.

*all info from Market Pointe Realty Advisors*