In San Francisco, the typical seller who’s
parting ways with their home for less than they originally paid is
losing $155,500. Nationwide, the median loss is roughly
$40,000.
(NASDAQ: RDFN) — Nearly one of five (17.8%) homes that sold in
San Francisco during the three months ending February 29 sold at a
loss, according to a new report from Redfin (redfin.com), the
technology-powered real estate brokerage. That’s comparable with
the 17.9% share hit during the three months ending January 31,
which was the highest in 11 years.
That’s a higher share than any other metro, and it’s more than
four times the national share of 4.3%. The national share of
sellers taking a loss is the highest it has been since May 2021,
but the share has been fairly stable over the past two years,
hovering between 2% and 4.5%.
In San Francisco, the typical homeowner who sold at a loss
parted with their home for $155,500 less than they bought it for,
the largest dollar loss of any major metro. Nationwide, the median
loss was $39,912.
This is according to a Redfin analysis of county records and MLS
data across the 50 most populous U.S. metros.
Some San Francisco sellers are losing money because they
bought when prices peaked during the pandemic
San Francisco home sellers are far more likely than sellers in
the rest of the country to lose money because home prices there
have dropped dramatically since the pandemic homebuying boom.
Still, the Bay Area is home to the most expensive real estate
market in the U.S.
San Francisco’s median sale price peaked at $1.66 million in
April 2022, and has since fallen 15% ($250,000) to $1.41 million as
of February. The typical person who bought in San Francisco at
nearly any point in 2021 or 2022, when the housing market was red
hot due to ultra-low mortgage rates, would have taken a loss if
they sold during the first few months of this year.
Local Redfin Premier agent Christine Chang said San Francisco’s
market is stumbling more than other parts of the Bay Area. “Home
prices have fallen from their peak, especially when it comes to
condos,” Chang said. “It’s not just because mortgage rates are
high. San Francisco has lost some of its appeal post-pandemic. A
lot of tech employers and big-name retailers have moved out of the
city, and some of my clients have reported they’re leaving the area
because they don’t feel as safe as they used to.”
It’s worth noting that most San Francisco homeowners who bought
during the last two to three years are hanging on to their home.
Some of the homeowners who are selling are likely doing so because
a life event such as divorce or job relocation has necessitated
it.
It’s also worth noting that San Francisco home prices have swung
up after hitting a low point of $1.28 million in January 2023, when
prices were declining in the face of elevated mortgage rates and
tepid demand. Home sellers would likely fetch a higher price now
than they would have a year ago.
Over 1 in 10 Detroit sellers take a loss on their home
sale
After San Francisco, Detroit had the highest share of homes
selling at a loss (10.8%) during the three months ending February
29. It’s followed by three other Rust Belt and Midwestern metros:
Cleveland (8.2%), St. Louis (8.1%) and Chicago (7.9%).
Sellers in those places are more likely than most to lose money
because, like in San Francisco, home prices have fallen quite a bit
from their pandemic peak. In Detroit, for instance, the median sale
price is down roughly 20% from its pandemic peak.
Additionally, housing markets in Detroit and Chicago have
suffered because they’re typically among the U.S. metros homebuyers
are most likely to leave.
Sellers in New England and Southern California least likely
to take a loss
Homes were least likely to sell at a loss in Providence, RI,
where just 1.2% of homeowners who sold during the three months
ending February 29 lost money. It’s followed by Boston, Anaheim,
CA, Fort Lauderdale, FL, and San Diego; roughly 2% of homes sold
for less than the seller originally paid in each of those
metros.
In dollar terms, homeowners who sold their home for less than
they originally paid lost the least in metros where homes are
inexpensive compared to most of the country: Pittsburgh and Kansas
City, MO (-$15,000) come first, followed by Detroit (-$16,812),
Houston ($-16,990) and Milwaukee (-$18,000).
The vast majority of sellers are making money on their home
sale
Even in San Francisco, where roughly 18% of sellers who part
ways with their home are losing money, more than four in five (82%)
sellers are selling for more than they bought for. The typical San
Francisco seller sold for $482,000 more than their purchase price
during the three months ending February 29.
Nationwide, about 96% of sellers are earning money on their
sale, with a median gain of $196,016. Today’s sellers are likely to
sell their home for more than they bought it for because the median
U.S. home-sale price is just 5% below the all-time high set in
mid-2022. The median U.S. sale price is more than $100,000 higher
(+40%) than before the pandemic began.
To view the full report, including charts, methodology, and more
metro-level data, please visit:
https://www.redfin.com/news/san-francisco-home-sellers-lose-gain-money
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We run
the country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. Our home-buying
customers see homes first with on-demand tours, and our lending and
title services help them close quickly. Customers selling a home
can have our renovations crew fix it up to sell for top dollar. Our
rentals business empowers millions nationwide to find apartments
and houses for rent. Since launching in 2006, we've saved customers
more than $1.6 billion in commissions. We serve more than 100
markets across the U.S. and Canada and employ over 4,000
people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20240410171559/en/
Redfin Journalist Services: Ally Braun, 206-588-6863
press@redfin.com
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