SAN DIEGO — Homeowners in San Diego are the least likely sellers in the country to lose money if they put their house on the market, according to a new study.
The study, which was conducted by the real estate company Redfin, analyzed real estate data from 50 of the most populous metro areas in the U.S. to get a sense of current market trends.
San Diego had the lowest share of homes sold at a loss — only 1.1%, the study found — over a three-month period that ended in July 2023. Nationwide, the share of homes sold for less money than they were purchased was around 3%.
Homeowners in Boston, Providence and Kansas City came close behind San Diego, according to Redfin — all reporting a share of sales that came under the seller’s original purchase price of about 1.2%.
For San Diego homeowners that did sell for a loss, the study found that the average difference between what they paid and the price it was sold at was roughly $66,500.
Of the 50 metro areas analyzed, San Francisco had the highest share of homes sold at a loss, coming in at roughly 12.3%. According to the study, that equates to about one in eight residents who sold their homes during the three-month time period.
Detroit (6.9%), Chicago (6.5%), New York (5.9%) and Cleveland (5.8%) rounded out the top five metros with the highest share of homes sold for less than they were purchased.
The typical homeowners in San Francisco who took a loss on the sale of their home saw about a $100,000 difference between the what they originally paid and what it ultimately went for.
According to the study, this trend was driven by outsized home-price declines, because of its position as the most expensive real estate in the country. With these higher housing costs, it had much more room to come down.
San Francisco was also one of the first markets to see prices sink when high mortgage rates triggered a slowdown in the housing market, Redfin said. By April 2023, the average home price in the metro area fell by a record 13.3% between years — a change that was more than triple the nationwide drop of about 4.2%.
Despite this change in the housing market, the vast majority of homeowners in the U.S. are still reaping gains on real estate sales — even those in San Francisco.
About 97% of homeowners nationwide sold for a profit between May and July, according to Redfin, with the typical home going for about 78.4%, or $203,232, more than the seller bought it for.
In San Francisco, the typical home sold in that metro went for about 70%, or $625,500, more than its previous price. Meanwhile, homeowners in San Diego have seen an average capital gain on home sales of about 88.9%, or $400,000.
“Today’s home sellers are making money despite an ongoing housing downturn in part because a scarcity of homes for sale is fueling bidding wars and propping up home values,” Redfin researchers wrote in the study. “Most people who bought when home prices peaked would lose money if they sold now, so they’re not selling.”
“Right now, it actually might be a good idea to get your foot in the door, literally," Realtor Destiny Roxas told NBC 7. "I say that because many sellers are aware of what’s happening in the market, they know that interest rates are high so therefore some of them are willing to give concessions to help incentivize buyers."
Read full article: https://www.nbcsandiego.com/news/local/higher-interest-rates-squeezing-san-diego-housing-market/3323799/
