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Welcome back to the Shawn Realty Podcast. Today, we’re delving into the real estate landscape of San Francisco and exploring some markets that have seen rapid appreciation in recent years.
According to new data from Redfin, approximately one in five homes sold in San Francisco during the first three months of 2024 resulted in a loss for the seller, marking the highest rate in 11 years. Nationally, the share of sellers taking a loss is also at its highest level since May 2021, but the impact isn’t as severe in other parts of the country.
In San Francisco, sellers who experienced losses typically parted with their homes for around $155,000 less than their purchase price, representing the largest dollar loss in any major metropolitan area. This trend can be attributed to buyers purchasing properties at peak prices during the pandemic when interest rates were low, and demand for larger spaces was high.
The median sale price in San Francisco peaked at $1.66 million in April 2022 but has since fallen by 15% to $1.41 million. Many sellers who bought during the peak years of 2021 and 2022 are now facing losses as a result.
One key takeaway from this situation is the importance of holding onto property if possible, rather than selling at a loss. Historically, those who weathered downturns in the real estate market saw their property values rebound over time.
The decline in San Francisco’s downtown condo market has been particularly pronounced, with many residents seeking safer and more spacious living arrangements outside the city center. The exodus of tech companies and retailers, coupled with concerns about safety, has contributed to the city’s loss of appeal for some residents.
In contrast, housing markets in New England and Southern California are less likely to see sellers taking losses, as they have held their value better.
It’s essential to consider the long-term implications of market fluctuations and to exercise caution when buying or selling property during uncertain times. While some areas may experience significant declines in property values, others may remain relatively stable or even appreciate over time.
I believe individual homeownership is more important compared to large-scale investment owning more single family homes. Despite challenges in the market, owning a home remains one of the best ways to build and preserve wealth over time.
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Shawn Realty 