A condo in downtown San Francisco dropped by nearly 30 percent since 2019, revealing the real estate market's cooldown in prices since the pandemic.
During the pandemic, many California and Bay area residents fled their high-price homes and rentals as remote work opened up cheaper areas of living.
And four years since the coronavirus hit, the real estate market is still adjusting even as home sale prices reached record highs across the country.
A one-bedroom unit located at 1235 Howard St in San Francisco is now listed for sale at $798,000.
Just five years ago, in 2019, the same condo sold for $1.1 million, a post from San Francisco real estate agent Rohin Dhar revealed on social media platform X.
San Francisco has been recording some of the biggest price drops in real estate across the country.
In May 2022, the average San Francisco home was priced at nearly $1.5 million. After a major drop over the next year and a leveling off since, the average home price in the city is now just $1.2 million, according to Zillow.
While generally, San Francisco's tech companies have caused real estate values to skyrocket over the past several years, other factors have brought the value of homes down, title and escrow expert Alan Chang said.
"Unfortunately, quality of living, including crime, has been equally staggering," Chang told Newsweek.
"As crime has pushed many residents to look for alternatives, the demand has softened, which has started to normalize the real estate values in this market. Putting aside crime rates, paying over a million dollars for a tiny condominium unit in San Francisco is not as appealing as it might have been prior to remote or hybrid work situations."
While reports of crime went down significantly in 2024 in San Francisco, it still remains far above the national average and has been in recovery since the pandemic saw higher rates of nearly every type of crime across the city.
"What we're seeing in situations like this in San Francisco is more of an outlier than the norm. In most housing markets, housing prices have remained steady, with cost declines being small to non-existent," Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek.
"However, the SOMA area this condo is located in has been one that has faced increased scrutiny for the rise of criminal activity and homelessness. It makes any sale difficult, let alone one aimed at luxury buyers. Whether it's a smart investment for a future buyer will really depend on how the city handles its problems going forward."
Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, said the overall housing market has been artificially stimulated by low interest rates and easy access to credit.
"As a result, housing values over the past decade have been inflated and are now beginning to cool due to higher interest rates and tighter credit access," Thompson told Newsweek. "The easy money policy of the past has led to this situation, and it will take time for prices to correct."
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