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“So have they released all the units now?”

“We have pricing on all of the homes. The least expensive units, on the second floor, overlooking the courtyard, one bedroom, one bath, are in the low $300s. And it goes up to $1.3 million for the penthouses with the large terraces.”

“Okay,” says Spick. Ian is sitting quietly in the stroller. Lutz has given the boy a peppermint candy to occupy him while she talks to his father. “Now, I guess,” Spick continues, “there are some financial questions I have. Let’s say I’m scheduled to move in in May. When am I expected to close escrow?”

“It’ll be within a few days of move-in,” Lutz says.

“Okay. So it’s not expected months before.”

“No. We will probably do the walk-through and have the sign-off sheet done for your home by March. And then we’ll get you all processed and do all that within a couple weeks of actually giving you the keys.”

“Okay.” Spick crosses his arms. “Are there any concerns, with the recent market in the state it’s in, that the units may not appraise for loan approvals?”

“You’re phase one, right?” Lutz leans against a corner of the table where the Vantage Pointe model sits. Spick says yes, he was one of the first to lock into a place. Lutz says, “Well, I really think phase-one buyers, especially on the upper floors like you are, will be fine. The lower floors may be a challenge.”

“Right,” says Spick. “Is the builder prepared to do anything about that? Because I’m certain he doesn’t want any vacancies.”

The builder of Vantage Pointe is the Calgary-based development firm Pointe of View.

“No,” says Lutz. “That’s right. He’s really focused on closing as many of the loans as he can that we have under contract right now.”

“Why I’m asking is, it looks like I’m going to have to get creative. I went into my bank the other day, Wells Fargo, and I was anticipating being able to rent out the townhome and to use the rent to be able to qualify for this. But I guess there’s a new federal policy now that you can’t use your rent to count toward equity unless you’ve had that rent for two years.”

“Wow,” Lutz commiserates. “Do you have equity in the property?”

Spick shakes his head. “I’m pretty much right at.…” He flattens a hand and moves it horizontally in front of his chest.

“Well, see,” Lutz says, “and this is the trouble. Wells Fargo is going to hold a seminar for our buyers to bring us all up to speed on stuff like that. Because the rules are changing daily. And they’re going to change a hundred times more between now and closing.”

“Right. Right,” says Spick. “That’s my concern. Because I still feel like it’s a wonderful investment, but I am concerned that if there’s a lot of people who are unable to qualify, what is that going to do to the value of the property if we have a lot of vacancy?”

“I don’t know what’s going to happen,” Lutz says. “Whether we do a buy-down program, to give a lower interest rate to the buyers, or…whatever we do, we’re well aware of it. Big-time talks are going on right now to figure out something.”

Spick nods. “Well, what’s the vacancy rate at now?”

“We have 43 percent under contract. We’ve been holding pretty steady. We’ve actually seen a lot more interested people lately.”

“Yeah. All of America’s on sale right now.”

Back in 2004, Vantage Pointe reserved 337 units — 49 percent of capacity — in the first weekend they were made available to the public. So having 43 percent under contract represents a decline from initial figures. Compounding the troubles at Vantage Pointe is the fact that there are already so many unsold condos on the market. The supply could last for several years.

According to Russ Valone, CEO of Market Pointe Realty Advisors, almost 22,000 housing units exist in downtown San Diego. About a third of that (32 percent) is subsidized, or single-room occupancy. The rest of the housing stock breaks down into 3600 apartments and 11,350 condominiums. Prior to 1999, there were only about 1300 condos downtown, so that’s 10,036 new units in the past nine years. Currently, 6441 condos are built, sold, closed, and have individuals living in them, either owner-occupied or rented out, and 3595 units are either still being built or are actively selling.

Of those 3595 available units, 1549 are new, or not yet built. Over a quarter of those, 389, are in Vantage Pointe.

One Who’s In and Wants Out

“I’m not at all unhappy with the decision to move to downtown,” states 25-year-old Jordon Harlan. Harlan lives with his older brother Landon in Union Square, on the corner of 14th and Broadway, in the northern part of East Village. “It’s what I wanted. I wanted to be able to walk everywhere, I wanted to be next to the cultural events. I wanted to be able to go to bars and street fairs. And that’s how it is. I live where people park to go to the ballgames. I’m 10 blocks from House of Blues. I’m 20 blocks from the bay. I can run through Balboa Park from my house if I want to. And I’m also about 2 blocks from the freeway, although I don’t have any freeway noise.”

Union Square is made up of three mid-rise buildings of steel-frame/wood construction and was completed by Western Pacific Housing in 2004. According to the downtown real-estate specialists at 92101 Urban Living, Union Square “sits in the path of development…the idea being that prices per square foot will increase as development around the area matures…Union Square is for the investor who is willing to be on the edge of development over the next few years.”

Harlan and his brother bought their condo late in 2005, and the two have lived there since. The price was $531,000, and they did a “credit back,” so that their loan totaled $550,000. They used the extra money to paint the condo, buy furniture, and make sure they had a little buffer left over in case of hard times.

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Comments

danwhitehead1 Dec. 3, 2008 @ 6:14 p.m.

I am completely sickened at how a collection of greedy swine took such an easy-going, laid-back, relatively inexpensive place, like San Diego used to be, and RUINED it. I'm glad I got to experience San Diego (and indeed the whole of southern California), before it was destroyed by the locusts.

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Fred Williams Dec. 4, 2008 @ 7:33 a.m.

Do the math:

The average wage in San Diego is just over $40k per year.

Take away just 25% for taxes, and you're left with $30k net.

That's $2,500 take home pay per month.

If half of it is going to housing, (which is high), you can only pay $1,250 per month for your mortgage, HOA, and taxes combined.

Nothing downtown at that price.

Well, let's assume that all the people living downtown are exceptional and make double the average in San Diego...$80k per year.

Still only $2,500 per month for your housing.

So your spouse or partner must make at least another average ($40k) salary just to make ends meet on a one bedroom place. Either one of you lose your job, and you're in trouble. No 401k or retirement savings to dip into for a rainy day now...

In other words, under any foreseeable combination of circumstances there are going to be a growing number of those who cannot afford their downtown condo in the next several years, and almost certainly the alleged values of these properties must drop further from where they are today.

It's a lot cheaper to rent, with no risk of going further under water, I can't understand anyone who is buying at today's prices.

Look at craigslist and see...

The elected officials of our nation, and San Diego especially, at the behest of their development and finance backers, threw fuel on the housing fire during the bubble years. Now, with unemployment shooting up and people's savings wiped out, how will they respond to the new crisis?

One thing is certain. CCDC's job is over. It built out downtown, as it promised, and now we've got too many condos that are simply too expensive for most San Diegans to ever buy.

Now the city needs to concentrate on encouraging wealth creation not through property speculation but by actually producing things of value. I'd like to see the city encourage start ups in some of these vacant units, especially the ones near the ground floor, where telecommuters and knowledge workers can actually find well paid work here.

We'll see what happens over the next decade, but I predict it's going to get uglier still if we don't adapt to the changes in the world around us, or hold our heads under the sand.

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stevewag23 Dec. 4, 2008 @ 1:49 p.m.

You really need to me making $150,000 per year in San Diego to pull it off and live a nice life.

No kids. No dog. No wife.

$300k if you want those things.

Anyone know where to get a job in San Diego for 300k?

And we don't even have topless beaches with Model girls.

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stevewag23 Dec. 4, 2008 @ 1:50 p.m.

danwhitehead1,

Agreed.

So what is the next move?

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NinaNaNaNa Dec. 4, 2008 @ 2:22 p.m.

I think all the people who were interviewed sounded like d-bags. With their "mommies and daddies" paying for these places, and "recent USD Grad's" - what do they know about struggling? Interview a family with two parents working to supports kids and a house and how stressed out they are about making their mortgage that they busted their a**es for and took everything they had to get into in the first place and it would really change the tone of this article. I don't feel bad for these people....at all. Maybe Spick, because at least he seems intelligent.

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danwhitehead1 Dec. 5, 2008 @ 5:42 a.m.

To Stevewag23: I really have no answer as to the next move. The damage has been thoroughly and extensively done. I left in complete and total disgust in December of 2000. The San Diego that exists now is a sickening, loathsome aberration of the real San Diego. At this point in time, I wouldn't care if I never saw it again (and I NEVER thought I'd live to say such a thing!!).

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stevewag23 Dec. 5, 2008 @ 9:59 a.m.

NinaNaNaNa,

Lets not talk bad about USD.

Its one of the last bastions of class this town has.

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stevewag23 Dec. 5, 2008 @ 10:02 a.m.

danwhitehead1,

I have to hand it to you.

I moved back in 2000!

You are smarter than me.

A lot of this country is in a similar boat so its difficult at times to figure where to move.

Any suggestions?

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nofears Dec. 5, 2008 @ 7:38 p.m.

What a great article for all San Diegans. I came across the same article as NinaNaNaNa and saw her comments. It was a good article because it was San Diegans honestly sharing thoughts about their City and it's future. That is what The Reader is, and has always been, about. I have lived here since 1963 and I miss the old San Diego, too. But, it's always your choice where you live. BTW, NinaNaNaNa, have you met these people or walked in their shoes? USD has always been about excellent grades, scholarships and ethics. Rich kids get expelled. Did you really read the article or are you just standing on a pedestal playing poor me? Are you raising your children to be victims of the economy or to hate what is evolving? If you can take the time to criticize, you must be intelligent. Why don't you take the time to go to City Hall {202 C St. 12th Floor}? Do something to make your children proud and not embarrass them further.

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JohnnyVegas Dec. 7, 2008 @ 3:13 p.m.

Anyone know where to get a job in San Diego for 300k?

And we don't even have topless beaches with Model girls.

By stevewag23

Only place to get a $300K per year job in San Diego is with the government-and that would include the benefits.

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JohnnyVegas Dec. 7, 2008 @ 3:19 p.m.

USD has always been about excellent grades, scholarships and ethics. Rich kids get expelled.

By nofears

nofears, USD expells no one. USD is simply a trust funder univerity who gives every advantage to their rich pampered students.

I personally had a trust funder friend at USD who would have not lasted 2 semesters at San Diego State-but because he was at USD he was allowed to withdraw from classes on virtually the last day of class-which he did repeatedly because he was failing and would have received an F. This went on for 8 years. He withdrew from 1 specific class he needed to graduate on 9 different occassions.

BTW-this clown finally graduated with this extra ordinary private university flexibility-which you would never in a million years find at a public university.

Dont tell me USD is the meritocrocy of education you make it out to be. It's not.

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nomasbean Dec. 8, 2008 @ 12:26 p.m.

Oh my God! I don't think I've ever read so many lies.

There aren't going to be any walk throughs" or punch lists for months and months!
No one is going to be moving in in April OR May. I work in that building. It's so far behind schedule it's a joke.
We have all heard that all of the unsold units are going to be rentals.
What a crock.
Run away!!!!

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Burwell Dec. 10, 2008 @ 10:33 p.m.

Spick should bail out of his condo and face his family responsibilities. Downtown is no place to raise a child. The area is rife with dopers and drunks. He should give up his dream of a fantasy lifestyle that he probably can't afford and remain in Scripps Ranch where the schools are decent. He's never going to get a loan to buy the condo anyway. Lenders know that he'll walk on the Scripps Ranch loan if he receives a loan to buy the condo. They've seen the pattern over and over.

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JulieParrots Dec. 10, 2008 @ 11:31 p.m.

I agree with Burwell that the schools are decent in Scripps Ranch. If not in Scripps Ranch then in Carmel Valley. You can't raise a kid in downtown. Spick should get out now while he can.

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mythusmage Dec. 11, 2008 @ 9:17 a.m.

Hate to tell you this, but more than a few of you are being a bit too optimistic. When things go pear shaped you're going to see condo projects being abandoned outright. No finishing, nobody moving in. Shooting galleries with stainless steel washers and dryers.

What will change things?

Federal indictments. Indictments on people in local government. Indictments on upper management at the Union/Tribune. Indictments on upper management in construction companies. San Diego will have to go into receivership, with a Federal judge as "Governor General".

Add in one or more local judges, plus at least one state official (Yo, Moon Beam!) in that list of indictment recipients, and San Diego's gonna be a happening place pretty dang soon. You'll know things are going down when Mike Aguirre is called to testify before certain Congressional committees and sub-committees.

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danwhitehead1 Dec. 19, 2008 @ 10:30 p.m.

Mythusmage

Don't faint when you read this, but you are 100% correct and I couldn't agree with you more as per your above comments.

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stevewag23 Feb. 2, 2009 @ 9:03 p.m.

"Only place to get a $300K per year job in San Diego is with the government-and that would include the benefits."

Yeah, but what about the topless beaches with Model girls?

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stevewag23 Feb. 2, 2009 @ 9:04 p.m.

"Downtown is no place to raise a child. The area is rife with dopers and drunks."

It actually could use more dopers.

It would make it more fun and we would get more tourists coming in.

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mitthbevnuruodo Feb. 3, 2009 @ 11:11 a.m.

Anyone with kids in downtown would be transporting their kids to private schools anyway. They surely won't send them to public ones there. There are surely not load of dopers compared to how it used to be. Friends used to hold gigs in Croce's basement in the mid 80's, when Croce's was the only place there. Now there were dopers then! Or even round '90 when we used to track from 5th ave down to, oh was it 9th and G St? to go to Java, now there were really dopers!

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