Once celebrated as the West Coast’s radiant gem, the city of San Francisco is now seemingly on the verge of an unfortunate descent. Yet, astonishingly, it appears few are heeding the urgent distress signals. The most striking impact has been seen in the housing market, where in the space of a year, property values have sharply declined and residents have been departing in large numbers.
The CEO of JPMorgan Chase, Jamie Dimon, drew a parallel between the dire situations of San Francisco and New York City, expressing that the condition of the Bay Area is considerably worse. During his interview on Fox Business, he succinctly outlined what creates a desirable city. Parks, arts, security, productive employment, and accessible housing all play crucial roles. A city that fails to adequately provide these essentials is likely to experience a population decline.
Regrettably, San Francisco is faltering on all these parameters. Consequently, the property market is experiencing a silent yet significant crash. Luxury properties, once the emblem of opulence, are now being discounted heavily to lure potential buyers. As an instance, a penthouse at the San Francisco Four Seasons Residential, which was initially listed for $9.9 million in November 2020, has reluctantly lowered its asking price to a mere $3.75 million, a staggering 62% drop. The property, having no takers, is still on the market.
A sense of urgency looms among homeowners, who, in their eagerness to avoid a sinking situation, are selling their properties at a loss. In some cases, homeowners have seen their investments contract by several hundred thousand dollars within months. A property on Fourth Ave., boasting five bedrooms, was sold for $1.1 million recently, after it was purchased for $1.6 million less than a year ago.
A two-bedroom condominium overlooking a ballpark on King St., which was purchased for $1.12 million in 2014, recently changed hands last month for $1.08 million. Another condo on Market St. was sold for $1.25 million in 2019, but was recently bought for just $675,000 after a price reduction. The overall pattern, as per recent analysis from Redfin, is quite clear: about one in five homeowners in San Francisco are selling their homes at a loss.
A distinct example includes a picturesque home with direct views of the Golden Gate Bridge and the Pacific Ocean. The property, ostensibly a rare find, was listed for the first time in almost 35 years last March, carrying a price tag of $12.8 million. However, following multiple price slashes over the year, it traded hands for only $7.85 million.
Nor is the commercial real estate scene faring any better. Post-pandemic, there has been a surge in the number of vacant office spaces. And the desperation is becoming increasingly visible. A property on Market Street was recently sold at a staggering 90% discount in a public auction. This building at 995 Market St. was acquired for a lean $6.5 million, a far cry from the $62 million it was purchased for in 2018.
Retail industry giants have also begun to withdraw from the city. Early this year, Macy’s announced its intention to close its enormous flagship store located in San Francisco’s Union Square. The preceding year had seen Nordstrom announcing the shutdown of two of their stores citing the worsening conditions in the vicinity.
Craig Ackerman, a seasoned real estate veteran, having witnessed the dynamics of San Francisco over three decades, expressed his dismay over the wasted potential caused by ineffective leadership. He anticipates several more years of regression if substantial changes aren’t made promptly. Yet, with the current city administration’s inclination towards symbolic gestures over pragmatic solutions, the future continues to look decidedly bleak.
According to Ackerman, he believes the city may face another five to eight years of misguided governance. He sadly notes that the situation is disarrayed and there’s no requirement for such a mess. He firmly believes that with a swoop of policy reformations, these prevailing issues could easily be mitigated.
Ackerman believes the city’s leadership is resistant to such evolutions, choosing to maintain the current state of affairs. ‘It’s simply preposterous, but they choose to let it continue,’ Ackerman told The Post. His assertion is that the officials are content to champion ideological symbols and search for an utopic state that remains elusive in reality.
He added, ‘I don’t foresee change coming anytime soon. They seem elated with their ideologically charged banners, aiming for an ideal world that doesn’t exist. It’s a quest that could prove costly if left unchecked.’
San Francisco’s future hangs in a delicate balance, much like many other cities challenged by economic downturns, shifting social dynamics, and a rapidly changing world. It remains to be seen whether its leadership will heed the lessons of its past, adapt, and find creative, effective solutions for the city’s many issues.
