California condo prices slashed as homes sell for half their original value

San Francisco's housing market is still suffering, with condos in the Californian city being sold for as little as half their original value.

The city—a magnet for the thriving tech sector—expected a rise in housing demand after rapid developments in the artificial intelligence (AI) industry. However, sales on condos, particularly in the downtown area are still making losses, to the point where San Francisco is the only major city in the U.S. in which it is cheaper to live now than it was five years ago.

Public listings for condos in San Francisco show heavy reductions in price, with one unit, previously sold for $1.2 million in 2019, settling at $825,000. That's a decrease of more than 30 percent.

In one particularly bad example, a condo on Mission Street in the heart of the city was sold for $775,000. In 2015, the same unit was worth $1.4 million, meaning it had lost almost 50 percent of its value in a decade.

Realtor expert Rohin Dhar described the sales as "brutal." According to his research, San Francisco is the only major urban area where housing costs have gone down. It is 1 percent cheaper to live there now than it was in 2019, while the average American city dweller, it's 48 percent more expensive.

The decline in condo prices in San Francisco started during the pandemic, as working-from-home initiatives and office closures led to a decline in workers needing to live in the city.

Between 2020 and the start of 2024, the average value of a condo in San Francisco dropped by 12.8 percent, from $1.14 million to just $997,000, according to Zillow, a real-estate marketplace tracker.

Recent developments in the AI industry led many to believe that interest in San Francisco property could recover, as the city remains a vital part of the U.S. tech sector and is a global hub for AI advancements. OpenAI, the producer of the widely-used chatbot ChatGPT, is based there, along with a thriving start-up industry.

Any benefits from this boost are yet to be seen, with condo prices still not recovering to pre-pandemic value. However, changing attitudes to in-person working could help restore the market.

Over two-thirds of professional U.S. companies said that their new job ads will no longer have the option of fully remote work this year, indicating a return to the office in 2025 that could herald the same demand for San Francisco housing that raised values so much in the first place.

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