According to the real estate marketplace company, Zillow, a downtown San Francisco based condominium was recently sold for approximately half of its purchase price from 2019. The downtown San Francisco area has been facing numerous challenges over the past few years.
Not Too Far From The Troubled Tenderloin Neighborhood
The condo has two bedrooms two bathrooms. It is located at 1075 Market St. which is only a five-minute drive from Union Square and a three-minute drive from the troubled Tenderloin neighborhood.
The property was listed for sale on the marketplace on January 18.
Low Selling Price
The asking price was set at $695,000. After staying in the market for a few months, the condo was finally sold on April 8 for $675,000 which is almost half of its selling price in late May 2019.
In 2019, the condo was sold for $1,250,000. According to San Francisco-based Redfin agent, Christine Chang, “Home prices have fallen from their peak, especially when it comes to condos.”
Property Value Depreciation In San Francisco
The case of this condo is not an uncommon one in San Francisco. A recent Redfin report revealed that almost 20% of home sellers in the city have sold their homes at a loss.
This number is four times higher than what is the national average at 4.35 of home sellers taking a loss during the sale of their property.
Market Trends
Redfin found that in the preceding three months ending on February 29, 2024 around 7.8% of total homes sold in San Francisco were sold at a loss.
In the preceding three-month period ending January 31, this share went up even further at 17.9% — the highest level it has ever been in almost 11 years and the highest share for any metro area.
Selling Price Is Typically Lower By $155,500
On average, homeowners in the San Francisco area sold their homes for $155,500 less than their purchase price.
According to Redfin, this decline can be attributed primarily to prices returning to normal levels after the pandemic-driven boom years.
At Least 188 Listings Have Had Price Reductions
As of April 15, there are 1,336 properties in total listed for sale on the Zillow marketplace. This includes apartments, condos, multi-family homes, single-family homes, and other options.
Among these listings, at least 188 properties have experienced a reduction in price.
Decline In Property Prices Across San Francisco
San Francisco used to be regarded as one of the most overvalued metropolitan areas in the U.S. However, property prices in the city have undergone a significant decline after the housing market correction that occurred in summer 2022 and spring 2023.
Downtown San Francisco, in particular, has been strongly impacted by a series of post-pandemic challenge. This includes a high office vacancy rate and increased retail theft – factors that have led to the closure of several businesses in the city center. All these factors have contributed collectively to the devaluation of properties in the area.
Last Year’s Modest Rebound
After experiencing a modest rebound between summer and fall of last year, home prices in the city began to decline again in October 2023.
Looking at the numbers on Zillow, as of March 31, the average home value in San Francisco is around $1,290,678. This represents a 7.5% decrease compared to the prices from the previous year.
Downward Slump In Property Prices
Home prices across the Golden State experienced a sharp decline from 2023 to 2024. As of March 31, the average home value in California is $783,666, representing a 44.5% reduction compared to the previous year.
Nationally, prices have slumped by 44.4% year-on-year, with the average home value standing at $354,179 which is considerably lower than the average home value in California and the city of San Francisco.
San Francisco Is Still The Most Expensive Real Estate Market In The Country
Even with the recent decline in prices, purchasing a home in California is still a costly affair due to persistent inventory shortages that contribute to higher prices.
San Francisco continues to hold the distinction of being the most expensive real estate market in the U.S.
Rebound Underway
According to a report released by Compass, the San Francisco housing market is experiencing a powerful rebound.
This spring is likely to be especially robust indicating a transformation of the housing market after a few years of sluggish sales.
Opportunity For Buyers
Patrick Carlisle, chief market analyst for the San Francisco Bay Area at Compass, remarked, “In the past year, I’ve often been asked where I saw the most opportunity for buyers, and I’ve always replied ‘the San Francisco downtown condo market,’ because it has been unnaturally depressed in recent years.”
Carlisle also said that he believes the second quarter of the year “may see the hottest market since the peak of the pandemic boom.”
Detroit Is Not Too Far Behind
Following San Francisco, Detroit has the second-highest number of homes selling at a loss in the three months ending February 29.
In Detroit, over one in 10 sellers, or 10.8% of the total sellers, have experienced a loss while selling their home.
Selling One’s Home At A Loss Is Least Likely In The City Of Providence
Conversely, homes are least likely to sell at a loss in the city of Providence.
In Providence, Rhode Island only 1.2% of total homeowners who sold their property in the three months ending February 29 experienced a financial loss.
