Posted BY: | NwoReport
In recent months, San Francisco’s real estate market has been facing a challenging downturn, with prices plummeting and many home sellers incurring significant losses. According to Case-Shiller data, the city has been experiencing annual price declines for the past eight months, with half of those months witnessing double-digit drops.
RedFin has added to this gloomy picture with a report indicating that home sellers in San Francisco are four times more likely to sell at a loss than the national average. Shockingly, the typical San Francisco seller who takes a loss sees their home go for a staggering $100,000 less than its purchase price. This is particularly concerning given the city’s other challenges, such as issues with sanitation and homelessness.
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Specifically, during the three months ending on July 31, approximately 12.3% of homes sold in San Francisco were purchased for less than what the seller paid, a sharp increase from just 5% a year earlier. This rate is four times higher than the national average of 3%. Detroit, Chicago, New York, and Cleveland followed San Francisco on this unfortunate list.
One key driver of San Francisco’s real estate troubles has been its significant home price declines, which outpaced national averages. High mortgage rates triggered a slowdown in the housing market, causing prices to drop rapidly. By April 2023, San Francisco’s median home sale price had fallen by a record 13.3% year over year. Though it recovered slightly by July, it still lagged behind the national market.
Factors contributing to this drop include the city’s high initial home prices, layoffs in the tech sector, and a shift towards remote work, which allowed people to seek more affordable housing elsewhere. Redfin users searching to leave these cities, including San Francisco, further highlight this trend.
Despite the dire situation in San Francisco, most U.S. home sellers continue to profit from their sales due to bidding wars and high demand. Nationally, 97% of home sellers sold their properties at a profit during the three months ending in July. This resilience is driven by a scarcity of homes for sale and long-term ownership, making most sellers immune to short-term fluctuations in housing values.
While the housing market faces challenges in various cities, the overall picture remains positive for many sellers across the United States, even during the ongoing downturn.
