High-rise condominiums near downtown San Francisco make up the bulk of San Francisco’s new housing stock, but they’re piling up amid rising interest rates. and shift in the city’s housing market.
Luxury condos are another casualty in San Francisco late return to office, the once-thriving social and retail scenes of SoMa and Mission Bay are now breathless. Homebuyers are looking elsewhere for less unconventional units, more outdoor space and, frankly, more living.
“Living downtown has far fewer amenities than it did pre-pandemic,” said Laila Salma, a broker at Salma & Company. ”
take $4 Million July Sale For a recent example, take a look at a unit at 181 Fremont, one of the city’s premier condo towers. The unit sold for about 30% less than his $5.77 million the seller paid in 2018, according to real estate blog Socketsite.
In a letter from a real estate broker about the sale, the Krishnan team said that the discount they were seeking at first “seemed impossible,” but that the offer was eventually accepted at $1.4 million less than the list price.
“The market is the weakest since 2008. This is especially true for San Francisco skyscrapers,” the brokerage wrote.
The same trend holds true for condos in lower mid-market areas. 1075 Market Units Purchased for $882,000 in 2018, it’s now on the market for $670,000.
“Some people lose a lot of money on these properties,” said Vanguard Properties broker Ilana Minkoff.
Condo prices fell 13% in August from a year earlier, according to the report. data from Vanguard property. But SoMa and the surrounding areas were the outliers. South Beach, Mission Bay, and Bayview were the only three neighborhoods where average condos sold below list price in August, with lower prices per square foot compared to other neighborhoods. It is Conversely, NoPa, Castro and Richmond condos sold on average at over 115% of their list price.
Dustin St. John, who returned to the city in 2016 after spending time on the East Coast and recently bought his first home, says he never looked at downtown condos, even though he worked in SoMa at the time. Told. He bought his twin “Fixer Upper” condo unit in Peaks (close to the Castro, his main social hub) last April and has spent the last year improving the property.
“I think downtown needs to reinvent itself and rethink itself to make itself attractive,” said St. John. It’s no longer an environment, and I don’t think it’s going to return to that state when offices reopen.”
Minkoff explained that downtown skyscrapers are declining in value, especially those owned by investors and previously filled with top-paying tenants near offices and transportation on the peninsula. .
However, the price drop in the area that includes SoMa and South Beach was particularly pronounced in the ultra-luxury segment, defined as condos priced at $3 million or more, where the second average price per square foot is almost 23% year-over-year. fell.Quarterly, according to to the compass.
“If you’re an investor, you don’t want the unit to sit empty for three years. You’ll want to sell it,” said Minkoff, noting that oversupply makes it more difficult. She is currently working with a client to sell a Mission Bay condo and recommends lowering the asking price by $100,000.