Counting Condos

For last night’s story about Vantage Pointe, I checked in with Robert Martinez from MarketPointe Realty Advisors for an update on the number of condos for sale downtown.

If the rate of new condo sales in downtown continues the way it did in the last half of 2008, it would take more than three years to sell all of the condos available for sale, Martinez said.

That doesn’t count Vantage Pointe’s 679 units, or 148 for sale at Bosa’s Bayside project.

Here’s how analysts put inventory numbers in context: Take the number of homes for sale and divide it by the number of sales in a month. That gives a metric called “months of supply.” Boom-time months of supply was usually very low in the county market, as only a few thousand homes were ever listed at a time, and sales were high. Across the county, analysts typically look for about a four-to-six month of supply ratio as an indication of a healthy market. (For more on countywide inventory, check out my recent post.)

How did Martinez get to that three-years number? (If you’re not an inventory nerd, skip the next two paragraphs.)

Take the 856 condos that are finished and unsold in downtown. And take the sales rate: 139 units sold in the last half of 2008, or about 23.2 units a month.

Divide 856 by 23.2 and it would take 36.9 months to sell all of downtown’s currently finished condos at that rate.

That supply-demand ratio has improved since last summer, when I reported it as part of this story about downtown real estate.

Then, it would take five years and three months to sell all of the new units in the city core.

An important note: every time sales inch higher (or lower) than that monthly average, the forecast for how long it takes to sell out of condos downtown shrinks or grows accordingly.

— KELLY BENNETT