According to new real estate data, a growing number of property owners are selling their houses for less than they paid for them.
Between August and October 2023, more than 3% of homes in the United States were sold at a loss, with some homeowners losing six-figure amounts on the sale. In comparison, only 2.4% of U.S. homes were sold at a loss in the same period last year, per data from real estate brokerage firm Redfin.
The most significant losses in home sales were in San Francisco, where the typical homeowner sold their home for $100,000 less than they bought it for. The median loss in the city was $122,500.
"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," Redfin real estate agent Andrea Chopp said.
Chicago, Detroit, and New York followed San Francisco in the list, with losses all north of 6%. In contrast, losses in home sales were the least common in Anaheim, California; Boston and Fort Lauderdale, Florida; and Providence, Rhode Island.
Several factors contribute to losses in home sales, with rising interest rates being one of the key contributors.
"With interest rates, obviously, there's a huge difference in where we were in terms of two years ago. People were locking rates at 2.5-3.5%, and now they're 7.5% and above, so that's a massive difference," Marcus Cronce, a realtor with Real Estate One, told CBS News.
Some Homeowners Still Reap Gains
While some homeowners in San Francisco have incurred losses, many sellers in the state still sold for a profit, with the typical home in the metro selling $625,000 more than the property owner bought it for.
Across the country, 97% of homes were sold for a profit, with the typical home selling for 78.4% more than the seller bought it for, data showed. For example, the proportion of losses in D.C. has shrunk to 3.5% from 2.7% last year.
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