Dennis Serraglio

It’s no secret the Downtown real estate market has slowed in the last 1_ years. Yet, the silver lining is that while sales are down, so is the rate of new residential development. No market rate housing construction has started Downtown in the last 18 months and there is no sign of any starting soon.

Last year at this time there were 550 resale listings for Downtown condos. Today that number is closer to 340. Inventory is declining. The reduction of inventory alone will cause a turnaround in the market within the next six to eight months. But pair this with improving financing options, lower interest rates and lower pricing, and the factors are all in place to support a revival in the market. When inventory dries up, condo prices will increase. It’s not a matter of if, it’s a matter of when.

In addition to a rebound in the market, we are going to witness a shift in the location of future developments. Most of the prime lots in the city’s core are already developed. So more and more we will be seeing future development in Downtown’s outskirts to the north and east. With this new residential development will follow neighborhood revival in older areas like Golden Hill, Bankers Hill as well as other neighborhoods north and east of Balboa Park. We have already seen this in the East Village and as the market improves it will expand farther east. The infrastructure and community improvement projects that the North Embarcadero Plan promise will add another layer of recreational amenities and lifestyle improvements for Downtown residents and over time will make the Columbia District one of the most desirable condominium neighborhoods.

Future Downtown residential offerings on prime development sites will include condos with more square footage. Today the average is 1,000 square feet with condos by Bosa Development averaging 1,300 square feet. Our future projects will average 1,600 square feet. The increase in home size is a major turn from what was demanded by buyers four or even five years ago.

Part of what has spurred the demand for larger homes is the influx of wealthy second home buyers from Mexico and the desert communities as well as wealthy buyers from North County who are either buying a second home or are downsizing from large homes yet still expect plenty of space. We are already seeing a shift in our buyer demographic from primarily young professionals to wealthy empty nesters. This trend is only going to increase as the baby boomer generation continues to move into retirement. This change in buyer profile has dictated and will continue to demand changes in home design. These buyers want more space, larger areas for entertaining and better amenities and finishes.

San Diego is one of the best cities on the West Coast and is also one of the least expensive when compared with Los Angeles, Vancouver or Seattle. Bosa has been in Downtown San Diego for more than 10 years and has seven towers to its name including three projects currently selling: The Legend at the Ballpark in the East Village, Electra in the Columbia District and Bayside at the Embarcadero under construction along the waterfront. Here for the long term, Bosa is positioning itself to launch its next project as soon as the market dictates and is actively looking for other development opportunities.

Dennis Serraglio, director of sales and marketing, joined Bosa Development in 1990 and was part of Bosa’s expansion into San Diego.