Nearly one in five (17.8%) of homes that were sold in San Francisco during the three months ending February 29 were sold at a loss of at least $155,500, according to a recent report.
That loss is higher than any other metro area in the United States. It is also at least four times the median loss of $39,912 recorded nationwide, per a new report from online property portal Redfin, which analyzed data from county records and MLS.
"In San Francisco, the typical homeowner who sold at a loss parted with their home for $155,500 less than they bought it for, the largest dollar loss of any major metro. Nationwide, the median loss was $39,912," the report read.
What Is Causing the Loss?
One of the reasons attributed to the loss is the home prices in San Francisco. Median home sale prices in the city peaked at $1.66 million in April 2022 during the housing boom fueled by the COVID-19 pandemic. However, home values have plunged since then, with the average price in San Francisco down 8.1% in the past year alone. The average home value is now $1.23 million, according to Zillow.
"San Francisco has lost some of its appeal post-pandemic. A lot of tech employers and big-name retailers have moved out of the city, and some of my clients have reported they're leaving the area because they don't feel as safe as they used to," local Redfin Premier agent Christine Chang said in the analysis.
Additionally, the city is considered one of the "worst-hit metros" in terms of falling office values, per Capital Economics. The firm also published two separate reports where they forecasted office values in San Francisco to drop between 35% and 40% by the end of 2025.
Despite selling at a loss, San Francisco home prices have increased from a low point in January 2023, when prices declined due to soaring mortgage rates and lack of demand, Redfin noted. Additionally, the online property portal said more sellers are making money than losing on the sale of their homes, with the typical seller selling $482,000 more than what they bought their home for during the same period.
