San Francisco (SF) Real-Estate Market

A San Francisco (SF) Real-Estate Market is a real estate market within San Francisco.

• See: San Francisco Housing Market, SF Government.

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References

2023

• https://sfstandard.com/2023/09/05/san-franciscos-real-estate-reset-is-already-happening/
  • NOTE: The article discusses how San Francisco's anticipated real estate "reset" is already beginning to take shape. The city had projected large budget deficits due to declines in commercial real estate revenue, and signs of this stress are emerging:
    • Transfer tax revenue (from property sales) plummeted to $186 million last fiscal year, the lowest since 2010. This was far below projections as there have been far fewer commercial property sales.
    • An increasing number of property owners are filing for temporary reductions in their assessed property tax values. Over 2,800 appeals were filed last fiscal year for $60 billion in property values. The city expects to refund $167 million in property taxes over the next 2 years due to successful appeals.
    • Falling property values are leading to lower tax revenue for the city. Analysis of 9 major building sales/expected sales shows the city stands to lose millions in property taxes due to lower sale prices versus assessed values. For example, 550 California's expected sale price is less than half its 2005 price, meaning a $1.4 million annual loss in taxes for the city.
    • While the drop in prices provides opportunities for some investors like Cyrus Sanandaji of Presidio Bay Ventures, it generally signals challenges ahead for the city's budget. Sanandaji believes the market will eventually rebound but "it's ugly for the city, for sure" in the short term.
    • Property taxes are the city's largest revenue source, representing over $2 billion annually. So declining values will pressure San Francisco's budget for city services. The extent of the reset is still unfolding but it appears the city's projections of major revenue declines are beginning to materialize.

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