This San Francisco neighborhood defies the city’s declining housing market

While much of San Francisco’s housing market is reeling from pre-pandemic times, one neighborhood remains resilient: the Sunset District.

Much of the city is seeing homes sit on the market for longer periods, but that area is still attracting buyers at almost pre-Covid rates — making it one of the few bright spots in a sluggish environment of real estate.

According to data from Redfin, homes in Sunset’s 94122 and 94116 ZIP codes sold in an average of two weeks between June and August 2024, a pace nearly identical to the same period in 2019 when the average was 16 days, the San Francisco Chronicle reported. .

Adjacent ZIP code 94127 also showed similar strength, with homes selling in an average of 14 days this year, just one day less than the 15-day average five years ago.

Meanwhile, homes in almost every other part of San Francisco took much longer to sell. Across the city, the overall average time to find a buyer jumped to 35 days in 2024, from just 24 days in 2019.

Redfin’s data underscores how much of the housing market in San Francisco, and California in general, has remained sluggish.

The market in the city by the Bay has been collapsing, The Post previously reported — attributed to factors such as inflation, crime and the drug epidemic.

Sales delays have been exacerbated by rising mortgage rates, which peaked after a drop in September and another rise in October. These changes in mortgage rates likely affected sales after the data was collected, but even before that, the numbers pointed to slower sales in most neighborhoods.

But not in Sunset, where homes are selling faster and fetching higher prices than the city’s median home value of $1.3 million. According to Zillow, typical Sunset home prices range between $1.4 million and $1.5 million, and they remain an attraction for buyers looking for a balance between affordability and the neighborhood’s many benefits.

“That particular area (runs) too hot or too cold,” Allison Crawford, of Sotheby’s International Realty in San Francisco, told the San Francisco Chronicle. “Recently, it’s been very strong, and if you look at recent sales, they’ve all gone well above the asking price.”

One of the main reasons the Sunset remains in demand is its comfort. The neighborhood boasts small shopping centers, easy access to Golden Gate Park via 19th Avenue, and close proximity to San Francisco International Airport.

The balance of affordability compared to other parts of the city has also kept interest high, as buyers looking for more space or family-friendly homes are drawn to Sunset.

In stark contrast, homes in some of San Francisco’s more affluent neighborhoods, such as Pacific Heights and the Marina District, are seeing a significant slowdown.

Data from Redfin shows that homes in the 94123 ZIP code, which includes those neighborhoods, took an average of 55 days to sell between June and August 2024 — more than double the 20-day average in 2019.

Michelle Harris, of Compass, says the combination of high prices and rising interest rates has made it difficult for buyers and sellers to close deals in these luxury areas.

“The change in interest rates … has really shut things down,” Harris explained to the media. With homes in Pacific Heights and Marina often priced in the multi-million range, sellers are being more selective about the offers they accept, not wanting to lose such significant investments.

Some are holding out for lower mortgage rates, not wanting to settle for a deal that would require them to take on a much higher monthly payment. This slowdown in wealthier neighborhoods is part of a broader trend affecting much of downtown San Francisco and surrounding areas.

The 94103 ZIP code, which includes parts of the South of Market district, has also seen homes stay on the market longer, taking more than three weeks longer to find a buyer than in 2019. The pandemic led to changes in important to buyer preferences, with many returning to suburban areas where they could have larger homes with yards and home office space.

That so-called “donut effect” drove down property values ​​in downtown San Francisco and nearby Oakland, which saw some of the sharpest declines in home prices during the pandemic. Although real estate prices in San Francisco are still among the highest in the country, demand for homes in urban areas has been slow to recover, and high prices continue to put homeownership out of reach for many.

Looking ahead, experts predict the San Francisco housing market will remain sluggish through 2025, with little relief expected in mortgage rates. Harris noted that the upcoming presidential election, as well as the holiday season, will likely cause further delays in home sales as both buyers and sellers will be resting.

“I think there are a lot of buyers who are already starting to hear the jingle bells,” she joked.