Recent Redfin analysis revealed that San Francisco home sellers are four times more likely to sell at a loss compared with the national average. Approximately 12.3% of homes sold in San Francisco from May to July were purchased for less than the seller paid, a sharp increase from the 5% rate a year earlier. This trend is the highest among major U.S. metros and is quadruple the national rate of 3%.
In San Francisco, the typical homeowner selling at a loss faced a median loss of $100,000, tying with New York for the largest median loss in dollar terms. Nationwide, the average loss was $35,538. Conversely, homeowners were least likely to sell at a loss in San Diego, Boston, Providence, R.I., Kansas City, Kan., and Fort Lauderdale, Fla., where only around 1% of homes sold for less than the purchase price, Redfin reports.
San Francisco home sellers were most likely to lose money because the region has experienced outsized home-price declines. It was one of the first markets to see prices sink when high mortgage rates triggered a slowdown in the housing market last year. By April 2023, San Francisco’s median home sale price was down 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 roughly $60 billion since last summer, a separate Redfin analysis found.
Prices in the Bay Area have fallen fast for a few reasons: First, it’s home to the most expensive real estate in the country, meaning housing costs had a lot of room to come down. It has also been hit hard by layoffs in the technology sector. Additionally, it’s not as popular as it once was; remote work has allowed scores of people to relocate to more affordable areas.
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