2^nd quarter downtown San Diego condo sales declined by 7% from the prior year; however, sales were higher than the same period in 2007, 2008 and 2009. While overall sales declined Marina, Columbia and East Village all had sales increases. These districts are the highest priced of the six districts indicating a shift in the buyer pool to higher end units. The major decline in sales occurred in Little Italy. Looking at sales by condo size we see that condos ranging in size from 1200 to 1800 sq ft had sales increases, these size condos comprised 30% of total sales.

The major change in the downtown condo market over the past couple of years has been the 42% reduction in inventory which has brought the inventory more in line with demand.  Currently the months supply for the downtown condo market is 3.4 months, the lowest is some time. District months supply ranges from a low 1.9 months in Little Italy and a high of 7 months in Columbia. The current inventory position should provide some protection against significant downward price changes.

2^nd quarter prices for downtown San Diego increased by 14% from last year; however, much of this increase is due to a sales mix shift to larger more expensive condos. Breaking prices down by district we do see year over year price increases in the Marina and Columbia districts. A change in high balance conventional and FHA loans at the end of September could have the impact of lowering demand and possibly prices. This will change the loan limits from the current $697,500 to the 2008 levels of $546,250. This means that jumbo loans with higher interest rates will be effective at lower purchase prices.