San Diego’s remarkably vibrant Downtown is really a major miracle. As a consultant, Marketpointe Realty conducts studies of the downtowns of most of the Western and Southwestern metropolitan areas. It is no secret that not one of these many metros has pulled off what San Diego has. Not San Jose, not Irvine, not Phoenix, not Sacramento, not a whole bunch of places that would like to emulate Downtown San Diego.

Most of those places have far more office space and employment Downtown than San Diego does and many have ballparks, too. But somehow, the fire has not been ignited.

This is not bragging on behalf of San Diego. Rather it is legitimate marveling at the amazing efforts of the development and finance industries that rose to the occasion and took the risk to make it happen.

Since 2000, remarkable risk takers like John Moores, Nat Bosa, Keith Fernandez of Intracorp, Doug Wilson, Joe Werner of Intergulf, Oliver McMillan, Mike deCotiis of Pinnacle International, and a host of truly gutsy individuals have made it all come true. In that timeframe, more than 5,000 condominium and rental units have been built and occupied. That is twice the number of market-rate units that existed prior to 2000.

Better yet, a fresh wave of construction is under way that will add 2,000 units by the end of 2007. Look at the holes in the ground: Electra, Icon, The Mark, Park Terrace and Smart Corner, to name a few of the condominiums. And rentals are under way, too, like OliverMcMillan’s G Street Lofts and Hanover’s Firenza.

Then there are the hotels. Hotels are, by nature, extremely difficult to finance, and yet since 2000, we have added the “W,” JMI’s Solamar, JMI’s Omni, Stanford’s Marriott Gaslamp (formerly Clarion), and are now in early construction of Tarsadia’s Hard Rock, Marriott’s Residence Inn and Marriott’s Renaissance. All while the open hotels are running full at full bore rates.

Back to condominiums. The market has been absorbing more than 1,000 new condominiums annually. Virtually every new project has been sold out prior to completion. Most of those now under construction are selling rather well.

This phenomenon would not have happened without Petco Park, a major miracle in its own right. With its Park in the Park and an ongoing series of musical and entertainment events there, it is the highlight of Downtown. And cheap fun, too.

A kind word also must be said for the Centre City Development Corp. The agency has been the catalyst responsible for the parking garages, the planning of the parks, the effective condemnation procedures that cleared the way for development and the financing that made the infrastructure possible.

Now let’s talk about value, a subject near and dear the hearts and wallets of owners and prospective owners of urban homes. Downtown’s condominiums are not exactly cheap. Many are downright expensive. The good news is that more than enough affluent San Diegans of all ages want to partake in the acquisition of these vertical homes. At least as long as interest rates are modest.

While we always want to look at the good side of things, one bit of gloom sits on the horizon. It has to do with rising construction costs. The main ingredient of most projects Downtown is concrete and steel, two commodities that have been increasing in price at an unreasonable pace. The result is that tomorrow’s condominiums are going to be far more expensive than today’s. In addition, new building regulations have driven up the basic cost of design and construction.

For the most part, the first-time buyer will be shut out of future rounds of development Downtown. In the past few years, it was still possible to produce condominiums for a reasonable cost, but that situation is fading fast.

The last hope for affordability lies in East Village in several projects that nailed down their costs prior to construction. Thus, Smart Corner, Vantage Point and one or two others can still produce units for a relatively modest price.

On balance, the major miracle that is Downtown San Diego will continue, albeit probably not at as fast a pace as in the past five years. In the next few years, we will see the maturity of East Village with its full complement of retailing and services and even a park or two.

Not many downtowns can boast about being on the water, within walking distance of a 1,200-acre park and zoo, have a first-rate ballpark, be five minutes from an airport and have virtually no slums. Oh, yeah, the weather’s not bad either.

Alan N. Nevin is director of economic research with MarketPointe Realty Advisors (marketpointe.com), a consultancy providing real estate and demographic statistics, feasibility studies and litigation support to the California land use industry and legal professions. Nevin can be reached by e-mail at anevin@sandiegometro.com.