Bargain Hunting for Condos

As they try for a division title three-peat this year, the San Diego Padres are playing in front of a much bigger crowd. Five new condo towers have sprung up since last season around Petco Park in the city's still-gritty East Village neighborhood.

But on a recent evening one right-field newcomer, the 223-unit Park Terrace, is mostly dark. Like other buildings that went up after the market peaked here in 2005, it's caught in a real estate downturn. Forty percent of its units are still unsold, with concessions like waiving closing costs and homeowners' association fees the only way to lure buyers.

More than 5,800 condos were added to San Diego's burgeoning downtown in the past five years, and prices here have doubled since 1999. But the speculators who stoked that frenzy have by all accounts left - and pricing has remained stubbornly flat. "I thought San Diego would fall in price further and faster than it has," says Gary London, president of the London Group Realty Advisors.

Yet, there are encouraging signs for bargain hunters. Plenty of inventory is on the way: An estimated 4,380 units will be completed through 2008, with another 1,700 scheduled for 2009. As a swell of new condos near their move-in dates, London predicts that the influx will force double-digit percentage price drops, not just around the ballpark but throughout the city's downtown. He's careful to note that he sees big potential for the area's livability - just not for its short-term condo markets. "My five-year forecast is pretty positive," he says." But it could get dicey over the next two years."

The Padres, on the other hand, may have a pretty good shot this season.