Local Apartment Market Sets Record

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SAN DIEGO-Demand for apartment product remains increasingly strong, according to a report released this week by Burnham Real Estate. According to the report, San Diego County set a record last year with an average price per unit of $177,189. It was the second consecutive year the area had set a record.Prices per units are up 6% from the previous year and up 143% since 2001. Officials with Burnham say there is a good reason for the increasing apartment prices. “The unprecedented demand for units for conversion to condos has driven apartment sales prices to unprecedented highs,” says George Carlson, vice president and apartment specialist with Burnham Real Estate.While the prices continue to point upward, that increase is beginning to slow. Carlson says that slowing is taking place “as investors look for the market to undergo a price correction. Following the rapid run-up in prices over the past four years, the market is due for a cooling period that will return it to a more balanced and efficient state.”According to the report, 16 of the 33 local submarkets reported increases, while seven were static and 10 reported decreases. The ritzy zip code of Coronado counted the highest average per unit with $340,580. That number was up 20% from 2004′s average price per unit of $283,636.The most dramatic price increases in the area occurred in Carlsbad, which reported a 94% spike to $276,734 per unit. That number was followed by San Marcos, up 44% to $187,083 per unit; and Escondido, up 27.8% to $159,215 per unit.Other increases occurred in San Ysidro, which had a 41.2% spike to $176,230 per unit; Golden Hill, up 21.7% to $137,912 per unit; and Pacific Beach, up 19.9% to $205,054 per unit.While prices have risen, the number of units sold is on the decline, according to Carlson. “The slowing in price increase correlates to a 35% decrease in the number of units sold in 2005 compared to the prior year,” he adds. “It is important to note that the annual number of units sold in San Diego County has fluctuated since 2000. The most recent decrease in units sold falls into the every-other-year pattern we have seen since 2000.”