A Condo’s Collapse

This is off topic, but if you’re at all as interested in real estate as I am, you’ll find this interesting.

I sometimes look through housing sales data. I know, exciting, right? I like it. I’ve always been particularly interested in watching downtown’s condo market. If you share this sort of hobby and you haven’t seen this site, or the county assessor’s impressive online database, check them out.

So, the other day, I’m looking through the sales data of one of my favorite downtown condo complexes – Little Italy’s Village Walk – and my eyes almost popped out of my head. Nestled right there between the Mexican Consulate and Beech Street, Village Walk is kind of a cool building. It’s one of the “older” complexes, constructed way back in 2002. It’s had a bit higher home values than some of its neighbors.

Except for unit 409.

Here’s the story of unit 409: It’s a two bedroom, two-bathroom condominium. It has 1,264 square feet. In October 2004, it sold for $630,000. In October 2006, just two years later, the condo sold for $500,000.

If you look through the data, you can find a bunch of places that are now selling for far less than similar or even less attractive properties were selling for a year or more ago. But this was a 21-percent drop in two years.

Wow.

Obviously the housing market is going through a correction. Some say it’ll crash, others say it will just “soften.” But even the most bearish of observers of the San Diego housing market would see a 21-percent drop in two years as a little extreme – an extremely large drop in a very short time.

I called the real estate agent who sold the property last month: Irvine-based Marta Riojas.

What happened?

Riojas said that the woman who sold the condo had been gifted it by her wealthy father, who purchased it for cash two years ago. The woman was moving to Arizona and just wanted to cash it out quickly – she didn’t mind potentially leaving money on the table.

But Riojas assured me that she could have sold it for more.

“Absolutely, she would have gotten more. But she didn’t want to deal with it anymore,” Riojas said, who adamantly denied that the sale was evidence of a housing crash.

But the only way to measure the value of a house is by the prices that surrounding houses garner. I can’t imagine the people trying to sell condos right around this one are too happy about the drop in price.

Riojas insisted it was just a good deal that one lucky buyer was able to get.

The housing market is fine, she said.

When a Realtor says that, you know it’s true.

– SCOTT LEWIS