• Return-to-office mandates are forcing some people to choose between selling their home at a loss or losing their job.

• Roughly 20% of surveyed sellers say they’re moving due to safety/crime concerns, a desire to live somewhere more aligned with their social views and/or lower taxes.

• About 10% of respondents cite discrimination in their neighborhood and/or worries about climate change as reasons for their move.

• The most common reasons respondents give for relocating are the desire for more space, proximity to family and a lower cost of living.

Return-to-work policies are motivating one of every 10 (10.1%) U.S. home sellers to relocate.

That’s according to a Redfin-commissioned survey conducted by Qualtrics in May and June 2023. The survey was fielded to 5,079 U.S. residents. This report focuses on the 616 respondents who indicated that they’re likely to sell a home and move in the next year.

While returning to the office wasn’t the most common reason respondents listed for moving, the response rate is notable because back-to-office mandates are an emerging cause of relocation. 

In Boise, ID, Redfin Premier real estate agent Shauna Pendleton has a pair of clients who are selling their home after only about a year because their Seattle-based employer is requiring them to return to the office. They will likely have to sell at a loss since they bought when home prices were near their peak.

“My sellers both work at the same company, which told them they have to be in the office three days a week or they’ll lose their jobs. They have six months to make the move,” Pendleton said. “They’ll probably have to take a $100,000 loss on their home. Their new house in Seattle won’t be anything close to the size of their property in Boise, and their mortgage rate will be much higher.”

Amazon, Apple, Goldman Sachs, Google, JPMorgan Chase and Meta are among the major corporations that have asked their employees to come back to the office at least part time. 

Redfin asked employees living within a 20 mile radius of its Seattle, San Francisco and Frisco offices to return to the office two days a week, but did not ask employees to relocate.

Roughly 1 in 5 Respondents Cited Social Views, Taxes, Crime as Reasons for Move

With mortgage rates near the highest level in over two decades, there aren’t a ton of people selling their homes, meaning many of those who are selling are doing so because they don’t have the luxury to wait. But the results of Redfin’s survey show that movers today are still considering factors including climate change and social issues when deciding where to live.

Nearly one in five (19.3%) respondents with plans to sell their home in the next year said they want to relocate to live in a place better aligned with their views on social issues. A similar share cited lower taxes (19%) and concerns about safety/crime (17.9%).

Also notable: one in 10 (10.6%) respondents said they’re planning to move because they’ve dealt with discrimination in their neighborhood. A similar share (8.4%) listed concerns about the impact of climate change on their neighborhood as a reason for relocation.

“Real estate is all about priorities and compromise,” said Redfin Chief Economist Daryl Fairweather. “While a lot of homeowners are staying put, refusing to give up their rock-bottom mortgage rates, some are opting to trade their low rate for a safer neighborhood, lower taxes and/or neighbors with the same political views.”

The desire for more space is the most common factor driving people to relocate, with one-third (33.8%) of respondents citing it as a reason for their move. Next came the desire to be closer to family (22.6%), followed by the desire for a lower cost of living (21.6%).

Many of the people who are moving today want homes that are bigger and less expensive. While those two pursuits may seem contradictory, some house hunters are achieving both by moving somewhere that’s more affordable. Of course, high mortgage rates are eating away some of the benefit of relocating to a less expensive place, with the average 30-year-fixed mortgage rate now at 7.12%.

The post 1 in 10 House Sellers Are Shifting Because of Return-to-Workplace Insurance policies appeared first on DAILY SAN FRANCISCO BAY NEWS.

San Francisco home sellers are four times more likely than the average U.S. home seller to take a loss, as the Bay Area metro reels from an outsized drop in home prices. The typical San Francisco seller who takes a loss sells their home for $100,000 less than they bought it for.

Roughly one of every eight (12.3%) homes that sold in San Francisco during the three months ending July 31 was purchased for less than the seller bought it for, up from 5% a year earlier. That’s a higher share than any other major U.S. metro and is quadruple the national rate of 3%.

Next came Detroit (6.9%), Chicago (6.5%), New York (5.9%) and Cleveland (5.8%). 

In San Francisco, the typical homeowner who took a loss sold their home for $100,000 less than they bought it for. San Francisco tied with New York for the largest median loss in dollar terms. Nationwide, the typical homeowner who sold their home for less than they bought it for lost $35,538.

Homeowners were least likely to sell at a loss in San Diego, Boston, Providence, RI, Kansas City, MO and Fort Lauderdale, FL. In each of those metros, roughly 1% of homes sold for less than the seller originally paid.

This is according to a Redfin analysis of county records and MLS data across the 50 most populous U.S. metropolitan areas. To be included in this analysis, a home must have been owned by the same party for at least nine months leading up to the sale. This data is subject to revision.

San Francisco Homeowners Take Hit From Plunge in Home Prices

San Francisco home sellers were most likely to lose money because the region has experienced outsized home-price declines. It was one of the first markets to see prices sink when high mortgage rates triggered a slowdown in the housing market last year. By April 2023, San Francisco’s median home sale price was down a record 13.3% year over year, more than triple the nationwide drop of 4.2%. As of July, it was down just 4.3% year over year to $1.4 million, but that compared with a national gain of 1.6%. The total value of homes in San Francisco has fallen by roughly $60 billion since last summer, a separate Redfin analysis found.

Prices in the Bay Area have fallen fast for a few reasons: First, it’s home to the most expensive real estate in the country, meaning housing costs had a lot of room to come down. It has also been hit hard by layoffs in the technology sector. Additionally, it’s not as popular as it once was; remote work has allowed scores of people to relocate to more affordable areas. 

San Francisco, Detroit, Chicago and New York, which top the list of metros where home sellers are most likely to take a loss, all rank among the top 10 metros Redfin.com users are looking to leave. 

“Some condos in the Bay Area are now worth less than their owners bought them for in 2018 and 2019, in part because commuting from Oakland and other outlying areas into downtown San Francisco isn’t really a thing anymore,” said local Redfin Premier real estate agent Andrea Chopp, who focuses on Oakland and other East Bay neighborhoods. “There are buyers out there, but they’re a lot more cautious and picky than they were when mortgage rates were low. The Bay Area housing market was unsustainable before, so this correction is probably healthy, but the unfortunate thing is prices remain unaffordable for a lot of people—especially with rates now above 7%.”

The Vast Majority of U.S. Home Sellers Are Still Reaping Gains

Even though home prices have fallen from their peak, a majority of home sellers are still reaping significant financial gains. Nationwide, 97% of home sellers sold for a profit during the three months ending July 31, with the typical home that sold going for 78.4% ($203,232) more than the seller bought it for.

Even in San Francisco, most homeowners are still making a lot of money. The typical home that sold in the metro went for 70.5% ($625,500) more than the seller bought it for. 

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. Most people who bought when home prices peaked would lose money if they sold now, so they’re not selling. Many of the homeowners who are selling today have owned their homes for long enough to make a profit regardless of month-to-month fluctuations in housing values.

In Boise, ID, Redfin Premier agent Shauna Pendleton has clients who will likely have to take a $100,000 loss on their home because they’re selling it after only about a year. They’re moving back to Seattle because their employer is requiring them to return to the office. Pendleton noted that it’s not common for homeowners to sell at a loss in Boise, but when it does happen, it often involves homes selling for upwards of $750,000.

Metro-Level Summary: 50 Most Populous U.S. Metro Areas

Statistics in the table below represent the three months ending July 31, 2023, unless otherwise noted.

The post 1 in 8 San Francisco Dwelling Sellers Lose Cash—Highest Share in U.S. appeared first on DAILY SAN FRANCISCO BAY NEWS.

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Coronavirus pandemic driving home buyers out of the Bay Area

Redfin reports this week that a quarter (24.5%) of home sellers in the San Francisco area cut their list prices in the four weeks leading up to August 2020, the highest percentage since at least 2015.

That is more than double the year-over-year rate and marks the largest annual increase in the share of active listings with price drops among the 50 most populous US metropolitan areas.

The rate of price drop in San Francisco was steady at over 24% in late summer and was 24.1% in the final period of the Redfin data – the four weeks ending August 23, 2020.

San Francisco was one of only 11 of the 50 largest metropolitan areas where the proportion of listings that drove down prices rose, up from 11.4% last year to 24.1%. Chicago, Philadelphia, and New York were among the ten other places where price drops rose year over year in the four weeks ended August 23.

“San Francisco buyers want fire sale deals, and they won’t settle until they find them. You’re in no rush because there’s so much uncertainty right now – if the price isn’t right, they can just rent a Lake Tahoe home for a year until their employer gives concrete advice whether or when they have to go back to the office, “said local Redfin agent Carlos Barrientos. “I see a lot of buyers making lowball offers that are initially turned down but are called back a few weeks later by the sellers saying they are ready to bring the price down.”

High-rise condos and smaller, dated homes – where a home office can be inconvenient or difficult to set up – are the types of property that prices are most likely to fall, Barrientos added.

San Francisco’s housing market has weakened during the coronavirus pandemic as its residents fled the dense, expensive city to find more space to make remote working and homeschooling more viable. In the second quarter, 22.7% of Redfin.com users searching from the San Francisco area wanted to move – compared to 21% last year and the second-highest proportion of all locations analyzed by Redfin (after New York only).

As a result of that shift, the number of homes in the San Francisco market increased 75% year over year in the four weeks ended August 23, forcing sellers to drop prices and giving buyers the upper hand. The median sales price for properties sold during the reporting period rose 6.6% year over year to $ 1.5 million, but was well below the 11.4% nationwide increase. It’s worth noting that the proportion of homes with price drops is a leading indicator, so the trend would likely not carry over to the median selling price until those homes find buyers and close their sales over the next several months.

“It might not happen right away, but we’ll likely see house prices in San Francisco fall at some point,” said Redfin chief economist Daryl Fairweather. “It’s clear that many homeowners feel that San Francisco is past its peak and that it’s better to sell sooner than later. Of course, the future of home prices largely depends on whether people return to the office or for that.” Companies work remotely. ” long term. “

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The post San Francisco Dwelling Sellers Dropping Costs at Document Tempo Mid-2020 appeared first on DAILY SAN FRANCISCO BAY NEWS.