Nearly one in five homeowners in San Francisco are selling their homes for a loss.
Some 17.8 percent of homes sold in the city during the three months ending Feb. 29 traded at a loss, Newsweek reported, citing figures from Redfin.
In the three months ending Jan. 31, the share of homeowner losses was 17.9 percent — the city’s highest level in 11 years and a higher share than any other major U.S. city.
The typical homeowners sold their home for $155,500 less than they bought it for, mainly because prices have swung back to normal after the pandemic boom years, Redfin writes.
Some home values have dropped further.
An unidentified homeowner sold a two-bedroom, two-bathroom condominium last week at 1075 Market Street for $675,000 — nearly half of what it last traded for in 2019, at $1.25 million. The condo is a five-minute drive to Union Square, and three minutes to the Tenderloin.
Home prices in San Francisco, among the most overvalued cities in the country, have plunged during a correction of the market starting in late summer 2022 and last spring.
Downtown San Francisco has been hit hard by a shift to remote work led by tech firms, which resulted in a 36.6 percent office vacancy.
A rise in retail theft led to Nordstrom, Whole Foods and other firms shutting down stores.
All this has led to properties peeling off value.
While prices modestly bounced back in the City by the Bay between summer and fall last year, they started dropping again in October, according to Newsweek.
As of March 31, the average San Francisco home was worth $1.29 million, or 7.5 percent less than a year ago, according to Zillow,
In California, home prices have also fallen since last year. The average home value in the Golden State was $783,666, down 44.5 percent compared to a year before.
Across the nation, typical home prices were also down by 44.4 percent year over year to $354,179.
Despite the drop in prices, the cost of buying a home in California remains high because of a chronic lack of inventory, which has buttressed prices. San Francisco is still the most expensive market in the nation, according to Newsweek.
At the same time, interest has ticked up in the San Francisco condo market, especially outside of the downtown core, according to The Real Deal.
The upswing in demand started late last year as interest rates came down, agents and developers say, and has continued this spring as tech buyers returning to the office are making deals with sellers who have come to terms with the drop in price required to close deals in the current market.
— Dana Bartholomew
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