Residents Lose Faith in Blue Cities

Homeless in San Francisco. By Tom Nast @ Adobe stock

Your Survival Guy, thanks to my Super States, knows this doesn’t happen by accident. Homes sell for losses when residents lose faith in the future. Look at what’s happening in San Francisco. Liz Lucking reports in Mansion Global:

More San Francisco home sellers are losing money on their sale than anywhere else in the U.S., according to a report Wednesday from Redfin.

Almost one in five, or 17.8%, of homes that sold in the city during the three months ending Feb. 29, changed hands for less than the seller originally paid, a share that is close to its highest level in more than a decade, the online property portal said. It’s also a higher share than any of the 50 metro areas included in the report, and more than four times the national share of 4.3%—which itself is at the highest level it’s been since May 2021.

Despite being home to some of the highest property prices across the country, San Francisco home sellers are increasingly likely to lose money because of how drastically real estate values have slipped in recent years, Redfin said.

The city’s median sale price peaked at $1.66 million in April 2022, and as of February had dropped 15%, or $250,000, to $1.41 million.

“Home prices have fallen from their peak, especially when it comes to condos,” said Christine Chang, a local Redfin agent.

In some good news for the city’s home owners though, prices have ticked up after hitting a low point of $1.28 million in January 2023, and the second quarter is expected to deliver further gains and the possibly “the hottest market since the peak of the pandemic boom,” according to a separate report from Compass on Monday.

Right behind San Francisco, Detroit had the second highest share of homes selling at a loss during the three months ending Feb. 29. In Motor City, more than one in 10, or 10.8%, of sellers lost money on their home sale.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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