Jay Sener, senior loan officer with First Capital, says he sees an increase in buying Downtown by attorneys, accountants and other professionals who work Downtown. ‘They like this community,’ he says.

Downtown living nearly sells itself. Oh sure, buyers still need agents and other professionals, while owners need marketing help to position their projects. But the atmosphere in the 92101 ZIP code is so exciting that some potential buyers are putting their names on the interest list of every new development. That says much for an area with average floor plans smaller than 900 square feet.

“People I meet already feel the excitement, convenience and energy of Downtown and therefore already know they desire to live here,” says Lew Breeze, a veteran urban real estate agent. “I would say the most popular kinds of homes are related to proximity. People like the energy and convenience of being Downtown. They realize that they will have to give up space. Views are often a factor in choices as well, though amenities aren’t often the reason.”

Breeze uses his Web site — 92101.info — to illustrate what he is pitching. “I sell Downtown because I believe in it (as an investment),” Breeze says. “I enjoy the energy, the convenience. Everybody is shopping (here). Twenty-something, 30-something, 40-something and higher. All age groups. I’m currently in escrow with a buyer who is just shy of 70 years old.”

Indeed, it doesn’t really matter what the (buyer’s) age is, says Kit Schindler, vice president of urban accounts for Ryness Co., which handles residential sales and marketing. “It seems to me that everybody is thinking, living and acting young. The mentality of being fit, vigorous and full of verve and full of young attitude.”

Downtown caters to the fit and busy lifestyle. With the harbor, parks, restaurants and entertainment a walk away, people are getting out and doing. They want to live where they play and if they can do it without their car and a commute, all the better.

Downtown Demographics Include Everyone

Kit Schindler, vice president of urban accounts for Ryness Co., says it doesn’t matter what the Downtown condo buyer’s age is. ‘Everybody is thinking, living and acting young.’ (photo/lambertphoto.com)

During the last five years, Downtown buyer demographics have expanded from very wealthy empty-nesters and desert residents who want second homes by the water. “Now every demographic wants to be Downtown and wants to be urban,” Schindler says.

Families with school-age children are the smallest group of buyers, being nearly nonexistent. “But we are even seeing them buying second homes and play places and suites where they can come and hang out and go to the ballgame for a weekend,” says Schindler. “Five years ago, people within the county started buying because the infrastructure started developing; it was fun to come down. You could dine and dance and drink and play and then go to your little pad for the weekend.”

Schindler recalls a family from Del Mar that purchased a unit in Cityfront Terrace. Two brothers purchased the home for weekends away with their children. “They threw down futons on the weekend and were having a great time,” Schindler says. “It may be an expensive weekend, but it’s not like dropping five grand on a hotel room you never see again. Mortgages are so inexpensive, real estate is such a great place to park your money. Why wouldn’t you buy that, hang onto it, get the appreciation, enjoy it, use it? It’s a complete package.”

But it’s not all play. Another group of buyers includes business travelers who see the benefit of living close to the airport and those looking to purchase a place with space for a home office. Statistics show only about 30 percent of those who live here work here. However, that does not take into account the smaller businesses with those owners working from their home, says Lee Mullinax, a partner with Vertical Properties, which has marketed eight major Downtown projects.

“I think those statistics are more referring to those who work in the large office buildings and companies based Downtown,” he says of the 30 percent. “I believe a much higher percentage of people who live here work here, but they may be in a home office in the second bedroom.” As new office buildings are completed, this number should change as employees are drawn to live closer to work. Jay Sener, senior loan officer with First Capital, says he already sees an increase in buying by attorneys, accountants and professionals who work Downtown. “They like this community,” he says.

The real estate market has altered residential expectations. East Village was designed to be workforce housing, planned for those who would work in service oriented or administrative fields in Downtown. “Unfortunately, with developers being motivated by profit margins, prices escalated from what should have been $195,000 to $350,000,” says Mullinax. He says developers are building smaller units, but prices are still closer to $400,000.

Little Real Estate Going To Rental Market

People are buying to live in their purchases. Vertical Properties screens interested buyers to limit the number of non-owner-occupancy to about 10 percent. “We think it’s important for the people who buy in the building to have most of their neighbors be other owners,” says Mullinax. “Because owners take better care of property than renters, we feel it is our obligation.”

As the Downtown residential market matures, it is beginning to function like its typical suburban counterpart. Move-ups, for example, are a big percentage of Breeze’s clientele. “People are moving from perhaps their first investment Downtown and two years later moving into a nicer and perhaps larger unit, which they probably reserved in pre-construction,” he says. Most move-ups are by those who can afford and seek the luxury of bigger projects like The Grande, with 1,945-square-foot units starting at $1.8 million that include amenities like a 24-hour concierge, pool, exercise room, and The Pinnacle with lap pool and media lounge and floorplans that reach prices of $5 million.

“It’s not about the real estate anymore,” Schindler says. “It’s not about the square footage you have. It’s about living a little leaner, a little lighter, but having the lifestyle; the pedestrian-friendly lifestyle. The at-your-fingertips everything you need. The community and the spontaneity of the lifestyle — that’s what people are looking for. They are doing with a lot less real estate to get it.”

It may not be grand in square footage, but Downtown real estate comes in a variety of colorful wrappers. The Marina District offers luxurious high-rise living. East Village has character, creativity and diversity in product and buyers. Little Italy is branded with charm and history. Cortez Hill feels isolated. The Gaslamp Quarter is close to the fun and excitement.

Colleen K. Cotter, a real estate agent with McMillin Realty, lives and works Downtown. (photo/Maya Ellman)

The distinctive nature of the neighborhoods is playing a role in where people want to live. Colleen K. Cotter, a senior Realtor with McMillin Realty, says younger people are looking at East Village and Little Italy for the price options. They also look at more units before they buy. The Marina District draws older, wealthier buyers. Cotter says these two groups are the definition of Downtown residents. “People who are starting out and people who are ending up. They are in their 20s or divorced, sick of the suburbs and keeping up the yard. I rarely see people with kids, unless they are from the East Coast.”

Younger buyers check out more options before buying as they face the price range reality check. “Good guidance from their Realtor should limit the slap,” Cotter says. Younger buyers getting their first loan also just want to get into a place; they don’t worry much about the rules that come with living in a building with a homeowner’s association. Empty nesters tend to balk more at the rules, Cotter says. These are people who most likely have never bought a condo. “They don’t understand the rules and the parking limits. They want to look at rules more than the price.”

But housing prices are high. For their money, Sener says buyers are getting a complete and different package that has no yard or two-car garage, but does offer a full palette of urban living amenities. “That’s something that we didn’t have here before,” Sener says. Testing out the lifestyle by renting first isn’t necessarily the wisest choice, says First Capital’s Sener. “Think of it like this. If you lived in a market where housing prices were continually on the rise, why would you rent for six months or a year, knowing that your buying power will be reduced, or worse, you’re priced out of the market six months later?”

Even with rates going up, the day of sprawling suburban home building is coming to an end. “There are no more hilltops to lop off,” Sener says. “It’s true that housing prices aren’t soaring like they were, but they are still on the rise. I think that come spring, though, the market is going to heat up a little.”