The 88 | A Year In Review

The 88 had a total of 13 sales in 2019 and just 10 in 2018. While 2018 consisted of just 3 2-bedroom units sold, 2019 saw significantly more opportunity to land one of 8 2-bedroom sales at the first sign of lower prices year over year since a slight dip from 2015-16 and before that since 2012. With the larger units taking precedence in 2019, the lower $/SqFt of $832 compared to 2018’s $875/SqFt shows that value actually held pretty well - even with what seemed to be a slower year. 

As seen in other buildings and parts of the South Bay Area market, it was a year of retreat in values and slowing of appreciation. Despite this, the 22 story building in the heart of downtown San Jose continues to draw interest even in so-called slower times. In addition to location, the 88 is one of the most amenity-rich buildings available which includes a full-size outdoor pool, spa, and sizable fitness center. Residents at The 88 also enjoy a gourmet kitchen, media room, business center, concierge service, and 24-hour security. Of all buildings in San Jose, the 88 may have the most to offer. 

With a few sales going above the $1000/SqFt mark, and with the appreciation rate accelerating in the area as a whole, it’s only a matter of time before its average passes $1000/SqFt. Although pricing may have dropped slightly last year and days-on-market increased in-line with the market overall, the desire for the building still stands. With 2020 off to a strong start, and the location tough to compete with for your established city dweller, the building will be desirable for the long haul. While more of the 2 bedrooms came to market in 2019, none of the 8 penthouses have been available for purchase since 2013. 

Should the market carry steam, I imagine some owners will be looking to cash out. When market tides shift and show signs of slowing or retreating, smart investors look for the exits. After being able to regain some equity to start this year I can justify the expectation of more turnover in general. I can also envision more sellers preparing for a move especially if values begin to give even subtle signs of slowing again.