Apartment Sales Hit High

SAN DIEGO-The third quarter yielded the most apartment sales since 1989 with 373 apartments sold, according to a report by Burnham Real Estate Oncor International. The number of apartments sold is 24.7% from last year and marks a 15-year high when the second quarter of 1989 saw 389 apartment sales.The 7,261 units transferred during the third quarter of this year was the second highest number transferred since 1986, when a record of 8,908 units sold in the fourth quarter. The only other quarter reporting a higher number of units transferred was the second quarter of 2002 when 7,466 units were sold.”The 1986 record was due to the flurry of year-end sales activity that occurred in anticipation of the Tax Refund Act of 1986 that went into effect Jan. 1, 1987,” says George Carlson, vice president and apartment specialist with Burnham. Carlson went on to say that that the high number of units transferred in the most recent quarter were due to the unusually high number of 15 major sales involving 100 units or more. “We continue to see strong investor activity in the San Diego County multifamily market, with a limited supply of product to meet steady demand,” he says. “The majority of these projects are planned for conversion to condominiums to help provide a more affordable housing alternative.”The number of building permits issued for new apartments in the city and counties of San Diego have dropped continually, and are well below those given out in 2002 and 2003. Burnham’s report shows that in the third quarter of this year there were just 28 apartment units permitted, down a dramatic 97% from the 952 units that were permitted during the same three-month period last year. The value of the 28 units approved during the third quarter of this year was $8.1 million, a 91.4% decrease from the $94.6-million value of the units permitted during the third quarter of 2003. Year-to-date 2004 permits are down by 73.8%, with 630 units permitted with a value of $68.9 million.