Just over a year ago, an 11,000-square-foot Russian Hill mansion in San Francisco was on the market. The $20 million price tag was steep for a five-bedroom, eight-bathroom home overlooking the bay, but it wasn’t anything special.
However, after several price reductions throughout 2023, the home at 2626 Larkin Street sold in November for $10 million. That was $10 million less than both the list price and the 2020 sales price.
Compass listing agent Nina Hatvany, who represented the seller, said the end of the year can be a good time to buy a home, as some sellers hope to sell their properties before the end of the year. He said there are many. Any losses can be written off on that year’s taxes, but she feels the end of the year can be even more psychologically taxing for sellers, she said. “They want to know that it will be resolved by the end of the year,” she says.
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The median home sales price in San Francisco has been steadily declining, falling to just below its 2018 level of $1.6 million so far this year, according to recent data from Compass. However, overbidding is still common. Compass said in a November report that in San Francisco, homes sell for an average of 7% above asking price, while condos typically sell for about 2% below asking price. Those numbers have remained roughly constant since March 2023, but data on how much those numbers have increased or decreased recently won’t be available until the new year.
Hatvany said the team’s sales have increased over the past three to four weeks amid a tough year, adding: “We’re glad sales are over.” Winter typically brings an overall slowdown in sales activity, with overbids dropping to their lowest levels of the year. As of January 2023, the percentage of homes sold for more than list price was just over 30%, less than half of the approximately 75% of overbids in April 2022.
It is unclear whether the extreme underbidding will continue in 2024. Another of his properties in Hat Bunny — 840 Powell St. Apt. No. 501 — sold last week for an asking price of $1 million. The four-bedroom, three-and-a-half bathroom Nob Hill condo sold for $3.3 million in March 2023 and sold last week for $2.2 million. “These buyers came in and made low offers, but the sellers really wanted to take the next step,” Hatvany said.
San Francisco’s condo market has been particularly tough, but it’s still unusual for condos to sell for far below what they sold for more than 15 years ago. 2222 Hyde St No. 1, for which Habatney represented the buyer, sold for $2.4 million at the end of October and in 2006 for $2.9 million.
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“Some of the prices we’re seeing are very unusual,” Hatvany said.