San Francisco was the only major U.S. city in June to see its home prices fall. Crime, cost of living, and the crypto crash are all pulling down demand for housing in the city. Bloomberg’s John Gittelsohn reports:
A palatial five-bedroom home built in 1932 with stained-glass windows, hand-carved doors and jaw-dropping hillside views of downtown San Francisco hit the market in April for $9.5 million. In June, the owners dropped the price to $7 million.
It went up for auction last week with an opening bid of $4.5 million. No offers emerged.
That kind of pullback is a stark turn for a tech-fueled city long marked by extreme wealth and ever-escalating home prices. Now, as the US housing market slows from a pandemic-era frenzy, the San Francisco area stands to be among the hardest-hit places.
Higher mortgage rates are driving up the cost of ownership and fewer people are willing or able to pay a premium for living in the country’s most expensive region for housing. And the area’s wealth economy is shuddering under the weight of tech-industry layoffs, falling stock prices and plunging cryptocurrencies.
The real estate market is already taking a hit: The San Francisco metro area’s median home price fell 0.5% in June from a year earlier to $1.58 million, according to Redfin Corp. It was the only one of the country’s top 100 metro areas to record a decline, the company’s data show, even as the price was still the highest in the US.
“The bloom is off the rose,” said Steve Gallagher, a Coldwell Banker Realty agent selling the 1932 home. “Even big buyers who’d pay cash for a $10 million home are thinking twice. It’s the economy, interest rates, the stock market, inflation.”
San Francisco’s economy is already struggling to rebound from the pandemic as remote work proliferates, with tech companies including Twitter Inc. and Salesforce Inc. cutting back on office space. For-lease signs plaster shuttered cafes, restaurants and drugstores that depended on office workers for business. Homeless encampments, open-air drug use in some neighborhoods and crime concerns aren’t helping to lure people back.