San Francisco Leads the Dive
Amid rising concerns about crime rates in major U.S. cities, San Francisco takes the unfortunate title of the city with the most rapid decline in home values. Astonishingly, 12.3% of homes sold there in the recent quarter fetched a price lower than what the seller initially paid – this figure is a stark increase from 5% the previous year, dwarfing the national average of 3%.
Cities with Crime Waves Feel the Pinch
When you list the cities where home sellers are grappling with losses, San Francisco, Detroit, Chicago, and New York rise to the top. These metropolitan areas are notorious for their well-publicized crime issues, undoubtedly contributing to the housing market downturn. Contrastingly, cities such as San Diego, Boston, Providence, Kansas City, and Fort Lauderdale showcase more resilience, with only about 1% of home sales incurring losses.
San Francisco’s Steep Dive
The magnitude of the financial hit for home sellers in San Francisco is substantial. With the average seller incurring a loss of $100,000 compared to their purchase price, the city stands alongside New York in terms of median dollar losses. Redfin’s analysis points to the Bay Area’s drastic home-price dips as the primary cause. In fact, by April 2023, the median home sale price in San Francisco plummeted a whopping 13.3% year over year. This descent is remarkably sharper than the national drop of 4.2%.
What’s Fueling the Decline?
Several factors are behind San Francisco’s property market plight. High mortgage rates, which began causing housing market stagnation last year, have significantly affected San Francisco. Remote work trends, sparked by tech-sector layoffs, have driven many to seek housing in more cost-effective regions. As Redfin agent Andrea Chopp comments, “Some condos in the Bay Area are now worth less than their 2018 and 2019 purchase prices,” highlighting the diminished importance of commuting to downtown San Francisco. Despite the market’s corrective nature, prices remain daunting for many, especially with soaring mortgage rates.
