Top 10 Cities Where Home Sellers Are Losing Big, With San Francisco Seeing 20% Take a Loss, Quadruple the National Average

In San Francisco, a significant number of home sellers are experiencing financial losses at levels not seen in over a decade. This uptick in losses can be attributed to home prices normalizing after a period of steep increases. Currently, nearly 20% of sellers in the city are selling their homes for less than their purchase price, with average losses around $155,500.

In contrast, the national scene is less bleak, with only 4% of home sellers across the United States facing losses, as home prices generally continue to hover near peak levels. The typical loss for those unlucky few is about $40,000.

Redfin conducted an analysis of the top 50 metros to narrow down the cities where the seller sold the home for less than they bought it for. Here are the top 10 cities where home sellers are facing losses

San Francisco, CA

San Francisco, renowned for its iconic Golden Gate Bridge, steep rolling hills, and eclectic mix of architecture, faces a challenging real estate market. As of recent data, nearly 18% of home sellers in San Francisco experience losses, with the median loss reaching a staggering $155,500. This rate is significantly higher than the national average. Despite its vibrant culture and booming tech industry, San Francisco’s real estate market shows that high demand does not always equate to profitable sales.

Detroit, MI

Detroit, known as the birthplace of Motown and the U.S. auto industry, is experiencing a mixed real estate scenario. While the city has been undergoing revitalization efforts, about 10.8% of home sellers still end up selling at a loss, with a median financial setback of $16,812. This reflects the ongoing challenges and disparities in economic recovery across different neighborhoods, despite Detroit’s rich cultural heritage and efforts to boost local industry and housing.

Cleveland, OH

Cleveland, situated on the shores of Lake Erie, is known for its rich musical history, including the Rock and Roll Hall of Fame. However, the housing market here sees 8.2% of its home sales occurring at a loss, with sellers facing a median loss of $20,765. The city’s market reflects a broader struggle in the Rust Belt, where economic shifts continue to impact real estate values unevenly across the region.

St. Louis, MO

St. Louis, home to the iconic Gateway Arch, blues music, and vibrant cultural scenes, shows a real estate market where 8.1% of sellers take losses, averaging a median of $18,500. This statistic highlights the challenges within a transitioning market that is still grappling with economic disparities and shifting industrial landscapes.

Chicago, IL

Chicago, a bustling metropolis known for its impressive skyline, deep-dish pizza, and rich history, faces its share of real estate challenges. Approximately 7.9% of home sales result in losses, with the median loss pegged at $30,000. Despite its economic diversity and cultural attractions, Chicago’s real estate market varies widely by neighborhood, influencing overall profitability for sellers.

Pittsburgh, PA

Pittsburgh, once the steel capital of the world, now thrives on healthcare, education, and technology. Yet, 7.3% of its home sales end in losses, with sellers seeing a median loss of $15,000. This reflects the uneven economic development and the transformation of its housing market amidst shifting industrial foundations.

New York, NY

New York City, a global hub of finance, culture, and entertainment, is not immune to real estate downturns. In this high-stakes market, 6.9% of sellers suffer losses, with a significant median loss of $97,723. The city’s vast economic disparities and the premium on space make the real estate market particularly volatile for sellers.

Baltimore, MD

Baltimore, known for its historic Inner Harbor, vibrant arts scene, and unique neighborhoods, sees 6.1% of home sales conclude at a loss, with a median loss of $27,000. Baltimore’s real estate market reflects its ongoing urban revitalization efforts, which have yet to uniformly raise property values across all areas.

Milwaukee, WI

Milwaukee, famous for its breweries and the Milwaukee Art Museum, also faces challenges in its housing market. Here, 6.1% of homes are sold at a loss, with a median loss value of $18,000. The city’s economic transitions, from manufacturing to service industries, impact its real estate values and profitability for sellers.

Austin, TX

Austin, a vibrant city known for its live music, tech industry, and outdoor activities, has a relatively high percentage of home sales at a loss compared to its overall growth story, with 6% of sales ending in the red and a median loss of $45,000. This illustrates the volatility that can accompany rapid growth and rising property values, challenging some homeowners when it’s time to sell.

New England and Southern California Faring Better

Homes in Providence, RI, were least likely to sell at a loss, with only 1.2% of homeowners seeing red during the three months ending February 29. Close behind were Boston, Anaheim, CA, Fort Lauderdale, FL, and San Diego, where approximately 2% of homes sold below their purchase prices.

In terms of financial impact, the smallest losses occurred in cities where housing costs are relatively low. Pittsburgh and Kansas City, MO, led with median losses of $15,000, followed by Detroit with $16,812, Houston with $16,990, and Milwaukee with $18,000. These figures reflect the regions where economic losses, when they occur, tend to be less severe.

Not All Gloom And Doom

The overwhelming majority of sellers are profiting from their home sales. Even in San Francisco, despite approximately 18% of sellers taking losses, a strong 82% are selling their homes for more than their initial purchase price. The average seller in San Francisco enjoyed a gain of $482,000 over the purchase price in the three months ending February 29 as per the Redfin report.

Across the nation, around 96% of sellers are seeing gains, with the median profit standing at $196,016. The likelihood of selling a home for more than its purchase price remains high, as the median U.S. home-sale price is only 5% below the peak reached in mid-2022 and has risen over 40% since 2019.

In California, home sellers generally see larger profits than those in other parts of the country. Following San Francisco, San Jose saw the next highest median gain where only 5% of sellers suffered losses and 95% profited, with gains averaging $695,000. In Anaheim, where just 2% of transactions were at a loss, the median gain was $510,000.

Affordable Regions Have Smaller Gains

Conversely, the smallest profits are often in the more affordable Rust Belt metros, although median gains are approaching six figures. The lowest median gain was in Cleveland, OH, where sellers netted an average of $70,650—a significant portion of the $175,000 median sale price. This is followed by Detroit, with a median gain of $72,000, and St. Louis, at $90,000.

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