ScottSD
Posts:139
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| 05/08/2008 6:28 PM |
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i just toured 5 or 6 units at aria. my impression is that they were very nice. some have some weird layouts, but in general they're spacious and seem well put together. they have a sheet of 17 units that have all had serious price cuts.
i'm fairly new to san diego, so i don't know the area super well. but i know the market is plummeting. i did some research on this site and others on discovery and it seems like a fire sale there. it freaks me out a little. so my question is: what do people think of aria in general? what sort of price per square foot do people think is reasonable for a nice, newer condo?
thanks in advance.
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lee
Posts:75
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| 05/08/2008 7:02 PM |
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| I wouldn't pay any more than $250 per square foot in this market anywhere. |
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ScottSD
Posts:139
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| 05/08/2008 7:08 PM |
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so 300k for a nice, faily large 2 bedroom in a nice new building?
i don't want to make some dumbass decision. but apartments are renting for low 2000's down here. with the tax benefits of owning i can pretty much break even on my rent at $400k. and that's including $500-600 HoA's.
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stella
Posts:268
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| 05/08/2008 7:29 PM |
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I liked Aria a lot, I'd buy but the prices are too high. I do agree some of the floorplans were a little wacky, I think that's a feature of the irregular lot. I think they did a pretty good job considering that. I really liked the decor of the place. I also think it has the best common area pool setup that I've seen downtown. The pool will probably not get tons of sun but what a great room they put together.
Cortez Hill in general is missing the boat on neighborhood retail. We have the former Twiggs which is now oddly high end Italian with crazy high drink prices and bad coffee which all hurt it as a neighborhood hangout. If you want great food the Indigo Cafe is great (not be be confused with the Indigo Grill in Little Italy). |
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stella
Posts:268
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| 05/08/2008 7:35 PM |
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I'd add to this that 777 Beech does have retail proposed. Along with the two hotels planned off Ash Street and Vantage Pointe down 9th Avenue Cortez is going to dense up nicely which can only help the neighborhood feeling that is needed at the retail level.
I'm bullish on Cortez in a 3-4 year time horizon. No train noise, close to Bankers Hill. If the city ever ends up putting the caps on Interstate 5 Cortez would flow right into Balboa Park which will also make it better. |
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ScottSD
Posts:139
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| 05/08/2008 8:20 PM |
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this is the nicest condo i've seen around this price. it's getting me too overamped. i know that prices are going to come down further, but for some reason i'm afraid that we're going to lose out on a nice place and be stuck with crap. that's probably a totally unreasonable fear.
my sister is a loan officer and says that the majority of people who used to be able to get loans aren't getting approved anymore. so maybe the aria's and electra's are going to take even more of a beating.
someone talk some sense to me.
this is a great site, by the way. thanks for all the input.
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stella
Posts:268
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| 05/08/2008 8:32 PM |
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It's been a LONG LONG time since you could walk through a building as nice as Aria and have such a huge selection of units to purchase. I'm actually in a postion to buy, tired of renting, want to own a place, I like the building but not excited about the market and the prices. This is a perfect case for a hedge in terms of having a way to have 20% downside protection on the price via some sort of commodity trade that would work in pretty much any other asset except real estate.
I think Aria has a chance to end up with a great building culture, people that are attracted to that type of decor should be relatively cool. The three bedrooms might inject some families and renters which add to the culture. The cheaper prices should make it accessible to people that are normal and the drop in real estate should hopefully also reduce all the empty places that someone uses once in awhile. You really want a lot of people in the building to keep it fun and interesting.
Also they told me that they are able to drop the HOA fees $100 per month because the concierge is coming out of the budget. This is a great move as it enhances affordability and in my humble opinion the concierge is a waste and just becomes a tool of the busy bodies in the building that complain about everything. I don't want to pay for it and I don't like the cultural impact. It's a good move and improves affordability slightly. |
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smp08
Posts:11
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| 05/08/2008 8:36 PM |
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I've toured Aria as well, I thought the pool area and gym were not desirable. The pool gets very little sun, the gym (for now), has very limited hours. I also thought the HOA's were high considering that they are very similar to Discovery for price of unit and HOA with significantly lower amenities. I was there about a month ago, so if prices have truly dropped 100k on a two bedroom, then it's better priced than it was before.
One thing to keep in mind, as you exit the 163 at Ash you have a straight shot of a unit's shower. This happens to be the bathroom for the "office" right now but they wouldn't show me the unit above the office. |
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stockjock
Posts:56
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| 05/08/2008 8:38 PM |
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Posted By lee on 05/08/2008 7:02 PM
I wouldn't pay any more than $250 per square foot in this market anywhere.
I think that your assessment is a bit too bearish. As you might tell from my user name, I'm a stockbroker/financial advisor by trade. One thing that' pretty much a constant is that the public gets far too bullish in up markets and way too bearish in down markets. This applies to real estate, stocks, gold or whatever.
I'm starting to see the sort of bearishness that we usually experience as any given decline approaches a bottom. You mentioned that you wouldn't pay over $250 per square foot right now in any building. This means that you think a 1,000 square foot unit in a nice building downtown isn't worth more than $250,000. I don't buy that we're going to see those levels. Sure, we'll see so-so units in so-so buildings hitting that level from time-to-time (El Cortez, et al), but the nicer units with good views in solid buildings should command a substantial premium to what you are suggesting.
Back to the subject at hand, it seems like the discounted units at Aria are relatively well priced, but I did notice that most of the 17 that were reduced in price are on the first or second floor. Also, I think that Aria has a pretty high HOA (starting at around $650/mo, if memory serves). |
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ScottSD
Posts:139
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| 05/08/2008 8:50 PM |
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HoA's were dropped $100. they're now $550-610 i think. still retarded but not out of balance with the rest of what i've seen.
the "list" is dominated by the second floor. for some reason i have a hard time believing that half of floor 2 is empty yet all of floor 3 is purchased. there will probably be another list like this coming out soon if they manage to sell these on the second floor.
some of the better units i saw had a ppsf of the mid 300's. that seems like a total deal given how nice aria is. at least compared to comps.
i'm tempted to make a low offer on one. maybe i can at least get an idea of how much they're willing to play ball after their 15-25% price drops. |
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stella
Posts:268
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| 05/08/2008 8:51 PM |
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Posted By ScottSD on 05/08/2008 7:08 PM
so 300k for a nice, faily large 2 bedroom in a nice new building?
i don't want to make some dumbass decision. but apartments are renting for low 2000's down here. with the tax benefits of owning i can pretty much break even on my rent at $400k. and that's including $500-600 HoA's.
Yes, I ran the same numbers and came to the same conclusion. I do think the rental value neutrality calculation like this is a sure sign that the market is actually making sense again. The issue for me is that I fully expect the market to over correct as this is the usual normal reaction to overpricing in all asset classes. I do wish you could shop the broader market with these numbers working as I do like Aria but I'd probably buy some other units that fit my situation better as I have a certain special need that most people don't have to deal with.
I will say that I'm running numbers based on renting the unit back out when I want to move on. If can I cover costs and return on my downpayment that's my "new" buy signal as at that point short of a big problem with the building I see no real long term downside to buying any property in San Diego.
That said there was one floorplan there that I'd pay a premium for if it was slighly different. |
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patinsd
Posts:23
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| 05/08/2008 8:56 PM |
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| Scott. I like Aria also. I agree with you in many ways about Aria. It's a cool layout and in a good location with potential. My big concern is the loan financing nowadays and the sales in the building. I also hear it is very difficult to get good financing (favorable rates and less than less than 20% down) in San Diego's "distressed" market. As for the sales in the building, I am worried that the builder may lease some out directly if the market stays cold for too long. I think that is a problem for a condo's value. I also think it is reasonably priced "for now." If the price was 10% lower now, it would give me more peace of mind by providing for some immunity for a near-term downturn. My current (but constantly evolving) opinion is that I am going to wait until the prices stop dropping 2-3% per month on the Case-Shiller index in San Diego. (It's not a perfect metric and it lags by several months, but it's a good measure of the local market.) If the drops start slowing to 1% month to month or flatten out for 3-4 months, then I'd be more eager at Aria. Just my thoughts. In summary, it can't hurt to wait unless you are absolutely certain you'll want to live there or own there for 10 or more years. |
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stella
Posts:268
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| 05/08/2008 9:13 PM |
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If you think about it the developer should really be bold and just come out with prices that are marked down 15-20% and get the place sold out. I'd but a unit at that level. Why sit on it for 2-3 years? The cost of holding a vacant condo is say 7% per year between the construction loan and the HOA fee that they have to pay. If they sit on half the units for two years that's 14% that was wasted on a vacant unit.
Also, if you think about it they are really back to square one with a building that doesn't have many sales. Back in the "old" days this was Phase 1 and Phase 1 had great deals because there was real risk to the first buyers. They should do a full on lottery for 15 units that are marked down 25% from the current levels, then another 15 units that are 20% off. They need people to start moving in and buying. It sucks they are losing money on it but business lose money all the time, besides Corus Bankshares out of Chicago is likely on the hook anyway and they've probably already written the loan down 30% on their books. |
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lee
Posts:75
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| 05/08/2008 9:31 PM |
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Posted By stockjock on 05/08/2008 8:38 PM Posted By lee on 05/08/2008 7:02 PM
I wouldn't pay any more than $250 per square foot in this market anywhere.[/quote]
I think that your assessment is a bit too bearish. As you might tell from my user name, I'm a stockbroker/financial advisor by trade. One thing that' pretty much a constant is that the public gets far too bullish in up markets and way too bearish in down markets. This applies to real estate, stocks, gold or whatever.
I'm starting to see the sort of bearishness that we usually experience as any given decline approaches a bottom. You mentioned that you wouldn't pay over $250 per square foot right now in any building. This means that you think a 1,000 square foot unit in a nice building downtown isn't worth more than $250,000. I don't buy that we're going to see those levels. Sure, we'll see so-so units in so-so buildings hitting that level from time-to-time (El Cortez, et al), but the nicer units with good views in solid buildings should command a substantial premium to what you are suggesting.
Back to the subject at hand, it seems like the discounted units at Aria are relatively well priced, but I did notice that most of the 17 that were reduced in price are on the first or second floor. Also, I think that Aria has a pretty high HOA (starting at around $650/mo, if memory serves). Not bearish... just being honest. If you are buying now, make sure you get at least 10% to 30% off of current market value.... As the market continues to have downward pressure on prices throughout the year.
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DowntownW211
Posts:2
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| 05/08/2008 10:58 PM |
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I toured Aria and was underwhelmed at the quality frankly. The areas outside of the elevators look like service areas. Bedrooms are tiny. Only electric cooktops, and the fit/finish was just okay. The pool area looks like an afterthought.
Keep in mind 650 units at Vantage Point will be online at the end of this year, although it appears they'll be finished on the "cheap" side. Discovery is a zoo and not aging gracefully. El Cortez is a disaster. There will a lot of inventory in Cortez Hill for the next 36 months.
Builders are greedy and will hold out for every last penny. Look at Smart Corner (aka Soup Corner) and the Mark as examples. The developers have been holding onto tons of empty units for years. Now Smart Corner is turning into rentals, much to the chagrin of the people who bought there!
Good times don't last, and neither do bad times. So if you find something you like, and you can afford it, low HOAs, and the ppsf is decent (ie $400 range with good const and a view) , then buy! Oh, and stick to cement/steel construction and away from stucco/wood.
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Brian
Posts:1085
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| 05/09/2008 12:08 AM |
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Posted By stella on 05/08/2008 8:32 PM
I think Aria has a chance to end up with a great building culture, people that are attracted to that type of decor should be relatively cool. .......... You really want a lot of people in the building to keep it fun and interesting.
I totally agree with that. I think there's very strong correlation between decor and personality. Think of the decor of the units at Meridian.
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Brian
Posts:1085
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| 05/09/2008 12:11 AM |
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Posted By patinsd on 05/08/2008 8:56 PM
My current (but constantly evolving) opinion is that I am going to wait until the prices stop dropping 2-3% per month on the Case-Shiller index in San Diego. (It's not a perfect metric and it lags by several months, but it's a good measure of the local market.) If the drops start slowing to 1% month to month or flatten out for 3-4 months, then I'd be more eager at Aria. Just my thoughts. In summary, it can't hurt to wait unless you are absolutely certain you'll want to live there or own there for 10 or more years.
That's very smart. I would err on the side of caution right now. There's tons of inventory and no harm in waiting until the winter.
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rkf619
Posts:24
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| 05/09/2008 9:39 AM |
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| To Stella - Interesting that Corus Bankshares is the financial backer. This bank is hitting all time lows and is on everyone's list to go belly up due to its huge exposure to condo developers. I would think they are putting pressure on the developer to close deal - bargain hard! |
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ScottSD
Posts:139
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| 05/09/2008 10:13 AM |
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so for you guys that have been watching this longer than i have, what would you suggest for an offer that won't make me want to hang myself in 6 months?
the one i'm eying is listed for $429k on the price drop list. down like $150k+ from its asinine original price. 1247 square feet. $344 ppsf. it's on the second floor, so its view is of the heritage apartments across the street.
i'm thinking it may not hurt to just wing an offer out there and see if they bite. i live at the heritage, so i can see how many lights are on in aria at night. i counted 5 last night. but if you guys think this is still pointlessly overpriced for where the market is going, please let me know. |
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smp08
Posts:11
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| 05/09/2008 11:01 AM |
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I would suggest looking at the unit from the outside...most of the units have windows in the bathrooms that give full views of the showers (and putting up a curtain wouldn't really work too well).
$344 ppsf is a decent deal for downtown but if you could wait, I would. If not, offer at least 10-15% below asking price.
Last month they had 15 units sold and 12 in escrow, again, I wouldn't buy in until it fills up more (closer to 50% sold and occupied). I wouldn't want it turning into rentals a-la smart corner. |
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