Redfin announced Wednesday that home sellers in San Francisco are now four times more likely than the average U.S. home seller to take a loss.
Around one in every eight homes sold in the Bay Area, particularly San Francisco, was done so at a loss, according to the real estate giant. The typical resident loses upwards of $100,000 on their original purchase price, signaling the start of what could be a devastating national housing collapse.
San Francisco’s housing market started to slow as mortgage rates reached astronomical highs in the wake of the COVID-19 pandemic. By April 2023, the median home price in the Californian city was down 13.3% year-over-year, more than three times the average U.S. decrease in the same period, Redfin continued.
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“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,” local Redfin premier agent Andrea Chopp said in a statement from the company. “There are buyers out there, but they’re a lot more cautious and picky than they were when mortgage rates were low. The Bay Area housing market was unsustainable before, so this correction is probably healthy, but the unfortunate thing is prices remain unaffordable for a lot of people—especially with rates now above 7%.” (RELATED: Surprising No One, America’s Worst-Run ‘Large’ City Is A Democrat Stronghold: STUDY)
Redfin noted that mass layoffs in the technology sector and remote work helped trigger the already vulnerable market into a downfall, although it also noted that the market in the city has more space to fall due to high prices. The city is also covered in filth, crime, and violence, making any reasonable person think twice about visiting, let alone living in what San Francisco has become.
As time goes on, it’s likely that many people either won’t be able to sell, and will be forced into foreclosure. A similar situation occurred prior to the 2008 financial crisis, so I dread to think what’ll happen this time around.