Almost a Quarter of Sellers in San Francisco Cut Their Property Price Last Month

And across the U.S., larger homes are gaining popularity, according to Redfin

Mansion Global | Liz Lucking

Increasing numbers of sellers are cutting their asking prices in San Francisco. Photo: Getty Images

A surging number of home sellers in San Francisco are slashing their asking prices in an effort to secure a buyer in a market thrown into disarray by the coronavirus pandemic, giving the city the dubious honor of being the metro area in the U.S. with the largest increase in the share of discounted listings.

Almost a quarter (24.5%) of sellers in the city cut the price of their property in the four weeks to Aug. 16, the highest share in the city since at least 2015, and more than double the rate from the same time last year, according to a report Thursday from Redfin.

San Francisco's real estate sector, like many major city markets across the globe, has seen an exodus of residents who are seeking less-dense living with more space.

As a result, the number of homes on the market in San Francisco jumped 75% year over year during the four weeks ending Aug. 23, which has in turn pushed sellers to cut prices to remain competitive, according to the report.

"It might not happen immediately, but we'll probably see home prices fall in San Francisco eventually," Redfin chief economist Daryl Fairweather, said in the report. "It's clear that many homeowners think San Francisco is past its peak and that they're better off selling sooner rather than later.”

The future of home prices, though, will largely depend on whether people return to the office, “or work remotely for the long run,” she said.

Another ramification of U.S. buyers seeking more space is a nationwide increase in the size of homes being sold, according to a separate report released Thursday, also from Redfin.

During the four weeks to Aug. 16, the typical home sold in the U.S. spanned 1,772 square feet, 3.7% larger than the same time last year.

From 2015 to 2019, the average yearly growth rate clocked in at just 0.4%.

“People want bigger: Bigger houses, bigger properties,” Chriss Houghton, a Redfin agent based in Vancouver, Washington, said in the report. “That's what people are asking for, whether their idea of big is a half-acre, one acre or 10 acres. If people are living in a small cookie-cutter home right now, they want a larger house with extra rooms and a dedicated place for an office.”

More larger homes are changing hands, too. Sales of large homes—defined as between 3,000 and 5,000 square feet—were up 21.2% annually in July nationwide.