Homes in San Francisco are declining in value more than in other U.S. metro markets.
About one of in eight (12.3%) homes that sold in San Francisco during the three months ending July 31 was purchased for less than the seller paid for it, up from 5% a year earlier. That's a higher share than any other major U.S. metro and is quadruple the national rate of 3%.
San Francisco, Detroit, Chicago, and New York top the list of where home sellers are most likely to take a loss. Those cities have had well-publicized crime problems.
Homeowners were least likely to sell at a loss in San Diego, Boston, Providence, Rhode Island, Kansas City, Missouri, and Fort Lauderdale, Florida. In each of those metropolitan areas, about 1% of homes sold for less than the seller originally paid, according to a Redfin analysis of county records and MLS data across the 50 most populous U.S. metropolitan areas.
In San Francisco, the typical homeowner who took a loss sold the home for $100,000 less than its purchase price, according to a Redfin analysis. San Francisco tied with New York for the largest median loss in dollar terms.
San Francisco home sellers were most likely to lose money because the region has experienced outsized home-price declines, Redfin noted. It was one of the first markets to see prices fall when high mortgage rates triggered a slowdown in the housing market last year.
By April 2023, San Francisco's median home sale price fell a record 13.3% year over year, more than triple the nationwide drop of 4.2%. As of July, it was down just 4.3% year over year to $1.4 million, but that compared with a national gain of 1.6%. The total value of homes in San Francisco has fallen by about $60 billion since last summer, a separate Redfin analysis found.
The Bay Area has some of the most expensive real estate in the country and has been affected by layoffs in the technology sector. Remote work has allowed scores of people to relocate to more affordable areas.
"Some condos in the Bay Area are now worth less than their owners bought them for in 2018 and 2019, in part because commuting from Oakland and other outlying areas into downtown San Francisco isn't really a thing anymore," said Andrea Chopp, Redfin real estate agent. "There are buyers out there, but they're a lot more cautious and picky than they were when mortgage rates were low.
"The Bay Area housing market was unsustainable before, so this correction is probably healthy, but the unfortunate thing is prices remain unaffordable for a lot of people — especially with rates now above 7%."
Peter Malbin ✉
Peter Malbin, a Newsmax writer, covers news and politics. He has 30 years of news experience, including for the New York Times, New York Post and Newsweek.com.
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