San Francisco Business Times
From the article:
As the number of available new condos in the East Bay keeps dwindling with nothing under construction, apartment owners may have an enticing opportunity on their hands.
The Ellington, a luxury highrise building in Jack London Square, is down to its last unit of the 134 it started out with in 2009. In the last six months, five units sold for more than $1 million.
Within the past year, other condo projects such as the 162-unit Pacific Cannery Lofts, the 88-unit Uptown Place, and 157-unit Eight Orchids sold out or are within a couple of units of selling out.
“Emotionally, there was a shift in the marketplace,” said Paul Zeger, principal of Polaris Pacific, a condo marketing and research firm. “Buyers have gone from ‘I’m not sure’ to ‘I have to get something before they’re all gone.’”
In January, there were 135 new condos available in Emeryville and Oakland, a 65 percent drop compared with 384 units during the same month last year, according to Polaris Pacific.
In the past few years, new inventory came in the form of units developers had turned to rental during the recession — a trend that has mostly played out.
That includes 132 units at Signature Development Group’s Broadway Grand, which restarted sales early last year and has about 60 units left.
“Sales during the first few months were slower than expected, but the last six months have been faster than expected,” said Mike Ghielmetti, head of Signature. “Job growth and economic growth numbers in the Bay Area have been favorable. And there’s a lack of inventory.”
Developers have not started building any new for-sale projects in Oakland or Emeryville for at least a year and it’s unclear if any will break ground in 2013, leaving another option for new inventory: apartment conversions.
Most projects built in the last decade or so come entitled with a condo map.
The market is heating up, but prices may have to continue to rise to convince landlords. Zeger said the average East Bay condo is selling for $300 to $400 per square foot, while potential sellers would probably price near $500 a square foot.