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Monday, July 27, 2009

San Diego: High-Rise Condos Sit Vacant

by Calculated Risk on 7/27/2009 08:37:00 AM

From Peter Hong at the LA Times: San Diego high-rise condo market goes from frenzy to fizzle

Drive through California's sprawling inland suburbs and you'll spot the familiar mileposts of a real estate bust: foreclosure signs, brown lawns and abandoned subdivisions.

To see the damage in downtown San Diego, walk a few blocks. Then look straight up.

There you'll see hundreds of unsold luxury condominiums stacked in vacant high-rises. ... Downtown San Diego, a 2.2-square-mile area, is now awash in condos. ... An additional 1,000 units that were under construction when the market soured are slated to be completed this year, adding to the glut and putting further downward pressure on prices.
Many of these new high-rise condos are part of the shadow inventory since they are not included in the new home sales report. High-rise condos were overbuilt in a number of cities like Miami, Las Vegas, San Diego, Chicago - and it will take several years to absorb all the inventory (or the units will be converted to rentals). Just another fine mess ... and of course a number of banks (like "Condo King" Corus Bank) will fail because of these projects.