A one-bedroom condo in the Yerba Buena of San Francisco is on the market for nearly $670,000. The property’s listed price on Zillow is less than its value has been since 2004, when it sold for $499,000, according to records on the real estate platform.
The home was at one point in May 2019 listed for sale for nearly $1.1 million but the listing was removed in June of that year. The next time it went on the market, it was valued at 32.5 percent less at $729,000. Since then, the unit has seen its pricing go down to its current listed price of $669,000.
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The trajectory of the price of the home appears to correlate with the fluctuations of property values in the San Francisco area. Homes are expensive in San Francisco. The median list price in the city is close to $1.2 million and they tend to sell a little higher than that at about $1.3 million, according to Zillow.
But the market in the San Francisco-Oakland-Hayward area has plunged by nearly 11 percent on a yearly basis from the height of the pandemic when it shot up almost 18 percent, according to the Federal Reserve Economic Data, which cited data from another real estate platform Realtor.com.
There may be a myriad of reasons why properties in San Francisco are seeing prices drop. The high cost of living in the area has contributed to people leaving. Between 2020 to 2023, the Bay Area saw its population drop by 4 percent, which is one of the highest losses compared to other metro areas in the country, according to online rental platform Zumper.
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Another reason could be mortgage rates elevated at above 7 percent have made buying less appealing for prospective homeowners which slowed competition and, in turn, caused a fall in prices. San Francisco is a market in flux, according to Norada Real Estate Investments.
“The median home price, which hovered around a dizzying $1.4 million in early 2023, has shown signs of plateauing, with a slight dip in recent months,” they noted. “Rising interest rates…have dampened buyer enthusiasm and impacted affordability, and an increase in available properties. As a result, the frenetic bidding wars of the past may be giving way to a slightly more measured approach.”
The Yerba Buena unit’s pricing could be affected by these dynamics.
“I think this is a pretty normal price reduction obviously for San Francisco. I wouldn’t say it was anything drastically different. I think it’s just the overall market condition has changed because of the interest rate increase,” Jing Fang, a real estate broker with a decade of experience in the Bay Area, told Newsweek.
Buyers are finding it difficult to afford to purchase homes after interest rates went up from the 2.5 percent they were at a few years ago.
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“Now it’s 7 percent, so the monthly payment is higher,” she said.
The listing described the property at Yerba Buena as one of five units. It is a one-bedroom, two-bath space of 1064 square feet.
“The spacious open floor plan with floor-to-ceiling windows features remodeled bathrooms, upgraded wide-plank white oak flooring, an updated kitchen, in-unit laundry, and one-car garage parking,” the listing goes on to note.
Newsweek contacted the listing agent for comment via email on Wednesday.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
