Wednesday, April 17, 2024 / by Bob Cowan
A CALIFORNIA CONDO SELLS FOR ABOUT HALF ITS ASKING PRICE AMID A SOARING HOUSING MARKET
According to data from real estate website Zillow, an apartment in downtown San Francisco—an area that has seen a number of issues in recent years—was sold this week for around half of what it cost when it was first purchased in 2019.
On January 18, the property, a two-bedroom, two-bathroom condo located near 1075 Market St., three minutes' drive from the problematic Tenderloin district and five minutes' drive from Union Square, was advertised for $695,000. It was sold on April 8 for $675,000, which is roughly half of the price the condo demanded when it was sold for $1,250,000 in late May 2019 after being on the market for several months.
This is by no means a unique incidence in the Californian city. Nearly 20% of real estate sellers in San Francisco experience a loss on their transaction; this is more than four times higher than the national average for house sales, which is 4.3%. This data was obtained from a recent Redfin survey.
According to Redfin, 17.8% of San Francisco house sales in the three months that ended on February 29, 2024, resulted in a loss. The share reached its greatest point in 11 years and was higher than any other metro in the three months that concluded on January 31st, at 17.9%.
The average homeowner lost $155,500 on their sale of their house compared to the purchase price. According to Redfin, this is mostly because prices have returned to normal after surging during the pandemic's boom years.
188 of the 1,336 properties—including single- and multi-family homes, condominiums, apartments, and lots—that were offered for sale on Zillow as of Monday, April 15th saw price reductions.
One of the most expensive cities in the nation, San Francisco, has seen a sharp decline in home prices during the late summer and early spring 2022 and 2023 housing market correction. A number of post-pandemic issues, such as a high office vacancy rate and an increase in retail thievery that has forced some businesses to close their downtown locations, have notably hurt Downtown San Francisco. And the value of properties has decreased as a result of all of this.
Although prices in the City by the Bay somewhat increased in the summer and fall of the previous year, they began to decline once more in October 2023. Zillow reports that as of March 31, the average property value in San Francisco was $1,290,678, a 7.5 percent decrease from the previous year.
Between 2023 and 2024, the value of homes fell precipitously throughout California; as of March 31, the average property in the Golden State was valued at $783,666, which was 44.5 percent less than a year earlier. Similar annual price declines of 44.4 percent were seen nationwide, with an average property worth of $354,179, which is still far less than that of California and San Francisco.
San Francisco continues to have the most expensive real estate market in the country, and even with the recent decline in prices, purchasing a property in California is still expensive due to a persistent shortage of available inventory.
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