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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (27710)	3/3/2005 2:17:00 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 110194

Russ, downtown SD is untested. I would not waste time trying to make sense of the numbers that you are looking at. There is a big supply and so far have been met by demand. The problem with this type of supply is the total lack of control. It takes forever to have plans approved and once started, you can't stop regardless of change in market conditions. Same occured for downtown redevelopment on the commercial side in the 1980s. We ended up with 1.5 million or so square feet of office space that ultimately took years to absorb. These condo projects have the addition problem of the HOA. If you are to look at the HOA budgets, I would doubt seriously that any are reserving in accordance to DRE guidelines. Furthermore, with defaults at historic lows, there are also no reserve for delinquent dues. It had been my experience that when there is a problem with these projects, they are far more difficult to solve than SFRs.

To: russwinter who wrote (27710)	3/3/2005 3:50:53 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 110194

Compared with pre-2000, when there was very little inventory available after October, the market now has an unusually high inventory in November through February. David Lereah the "economist" for the Nat'l Assoc of Realtors recently spun this glut of inventory as a positive saying, "December home sales increased dramatically over the prior December." Well they would wouldn't they, when you have a large inventory in December for the first time. Regarding downtown San Diego condos in particular, Ramsey Su gets right to the heart of the matter in his comments on condos in downtown San Diego. Pardee Homes built the first condo project in San Diego years ago inexplicably called Park Row - there was no park and it was located in the middle of, what was then, skid row. The area has increasingly become a convention center with a surfeit of hotel rooms. Old run-down buildings continue to be converted into condo or torn down into condos as fast or faster than they sell. Ten years from now it may be a stable market with the renewal completed. .