California Condo Sells for Half Its Market Value as the Housing Market Shifts

A condominium in downtown San Francisco sold for half the amount the previous homeowner paid for it back in 2019.

While San Francisco used to be a hub of prosperity, making it one of the most overvalued metropolitan areas in the country, housing prices have dropped dramatically.

The red hot California real-estate market has finally cooled down. 

The condo was listed on Zillow for sale on January 18. Located near the heart of San Francisco, the unit should have sold well over its 2019 asking price of $1.25 million.

This isn’t an isolated issue that plagued California. From the uber-rich like Kylie Jenner (who is struggling to sell her $21.9 million home) to the home-owning class, California’s housing market has been rocked, especially in San Francisco.

Nearly 20 percent of home sellers in San Francisco are taking losses on their sales, which is four times more than home sellers at the national level (via Newsweek).

In one shocking example, a home in Oakland, California, just outside of tech-hub San Francisco, experienced a depreciation of almost one and a half million dollars. 

Although the beautiful home had a reduction of more than $1.5 million, it has still been sitting on the market without much interest. 

As with many areas in the nation, California has felt the heat of the interest rate hikes over the past year. 

California has the third-highest number of realtors in the U.S. They sit just behind Florida and Texas: two states that also share the same real estate frenzy.

Another common bill for homeowners has drastically changed the ability for many people to continue to afford their house: property taxes. 

While many tech companies used to call San Francisco and the Bay Area home, many have left the state or shuttered their doors completely.

Downtown San Francisco has taken the biggest hit from this ongoing correction, which might feel like an over-correction as many people are taking losses on their home sales and businesses close their doors.

Adding to the city’s haunt is the absence of a major mall: Westfield Mall. The mall, which sat near the heart of Downtown San Francisco, closed the shopping center due to several factors.

Another contributor to the high home prices in California is a direct result of the regulations the state has put in place that make building new homes a slow and expensive process.

Despite the recent drop in home prices across the Golden State, California’s home prices are still high due to a lack of inventory.

While the recent changes in property ownership has slowed down the market and caused some home sellers to take a loss, the state still has record high prices on houses. 

Due to the fact that there is a major housing shortage all around the United States, homes are still selling, even when prices remain unaffordable. 

Houses in California became unaffordable for several reasons, but the most glaring one was the supply-demand.

Even if residents were able to find affordable housing, there is a chance that these homes are in “danger zones,” which means they are susceptible to flooding or fires.

In many states, building affordable housing for families is one of the top priorities. 

For anyone in the financial position to buy a home in the Golden State, now is the time.

Although the initial slump has caused a lot of fear for homeowners in the first portion of the year, the rest of 2024 will look different. 

While prices in the Golden State seem to be going down, it is unlikely that homeownership is still in the cards for the modest middle-class couple or family.