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San Francisco homesellers are taking a hit from a dramatic plunge in home prices in the Bay Area.
As home prices in San Francisco fall from their highs of the pandemic, roughly 1 in 8, or 12.3 percent, of San Francisco homesellers who sold their homes during the three-month period ending July 31 lost money on the sale — up from 5 percent a year earlier, according to a new study from Redfin.
The typical San Francisco seller who sells at a loss is selling their home for $100,000 less than they bought for, according to the study, as the region experiences outsize price declines from the pandemic market. Nationwide, the typical homeseller who sold their home for less than they bought it for lost only $35,538, according to Redfin.
At 12.3 percent, San Francisco has the country’s highest share of sellers taking a loss on their investment, at quadruple the national rate of 3 percent. This was followed by Detroit at 6.9 percent, Chicago at 6.5 percent and New York City at 5.9 percent.
San Francisco’s median sale price dropped 9.7 percent over the past year to $1,325,000, according to Redfin data. In 2022, prices were already on the decline as San Francisco was one of the first markets to contract once mortgage rates started to increase. In April, San Francisco housing prices were down 13.3 percent year over year, more than three times the nationwide drop of 4.2 percent. The total value of San Francisco’s housing stock has fallen by approximately $60 billion since the summer of 2022, a Redfin analysis found.
Prices in the Bay Area have fallen so dramatically, in part, because it’s home to some of the most expensive real estate in the country, giving it a lot of room to fall. Other factors included a wave of layoffs in the tech sector that anchors the city along with the increasing popularity of remote work, which made it a less desirable place to live, according to the report.
“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 San Francisco Redfin agent Andrea Chopp. “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 percent.”
Even with prices dropping, the majority of San Francisco homesellers are still making gains. The typical home that sold in the metro went for 70.5 percent more than the seller bought it for. Nationally, 97 percent of sellers made a profit during the three months leading up to July 31, with the typical home going for 78.4 percent more than the seller bought it for, according to Redfin.
