Despite experiencing one of the coldest summers in decades, San Francisco’s upscale condo market is witnessing a resurgence, driven by affluent buyers attracted to strategic price cuts and an optimistic outlook for the city’s future.
Real estate agents are noting that the renewed interest is intertwined with the prevalence of artificial intelligence (AI), as buyers either work in the sector or have connections to those who do.
Carmen Legarda, a Compass agent, highlighted the situation at 181 Fremont, a luxury condominium tower, which has seen a notable uptick in contracts over the past few weeks.
One standout property, a luxurious penthouse occupying half of the 68th floor, had been initially listed at $15.5 million in 2019 but struggled to find a buyer during the pandemic.
After multiple price drops—to $13 million last year and $10 million in late February—the unit has finally gone under contract this month.
Legarda emphasized the significance of these price adjustments, stating that they have notably impacted buyer activity.
Historically, downtown condos with their modern amenities such as fitness centers and 24/7 concierge services commanded higher prices than older properties elsewhere in the city.
However, this trend shifted in 2020, as downtown condo prices fell behind those of the rest of San Francisco, impacting sales and buyer confidence.
Towards the end of last year, luxury condo sales in downtown San Francisco began recovering, spurred on by hopeful sentiments regarding the Lurie administration.
Though this optimism was soon challenged in early spring, when the stock market and broader economic uncertainties—labeled the ‘Trump slump’ by real estate expert Paul Zeger—led to a tentative buyer sentiment.
The geopolitical and economic volatility prompted many prospective buyers to adopt a wait-and-see approach.
However, as conditions stabilized and the market regained its footing, Zeger noted an increase in buyer activity, even during the traditionally slower summer months.
Zeger, a founding partner at Polaris Pacific, remarked that agents have maintained relationships with potential buyers for years, preparing for this precise moment when lowered prices merged with renewed interest in downtown properties.
He expressed that strong spending in the luxury market signifies a positive outlook for San Francisco, as high-end buyers often have multiple housing options elsewhere.
Today, they are increasingly recognizing San Francisco as a desirable location that offers both quality living and favorable pricing.
Developers are also strategically releasing their most sought-after units.
At One Steuart Lane, for example, certain condos in the building’s 01 line attract buyers due to their breathtaking views of the Bay Bridge and the waterfront.
One unit, 1001, a spacious three-bedroom, three-bath property, sold in November for $9.25 million.
Taking a cue from this transaction, Polaris decided to offer a comparable unit located one level below at the same price, which eventually went into contract in July.
The demographic of buyers has noticeably shifted since the pandemic, with many now seeking to establish San Francisco as their primary residence.
Pre-2020, many buyers at 181 Fremont were looking for secondary homes to supplement their main residences in locations like the South Bay or wine country.
In contrast, current buyers are predominantly locals who are relocating within the city and opting for upscale living as their primary choice.
Zeger pointed out that while haute luxury home collectors still represent a segment of the market—this includes individuals owning properties in global cities like London, New York, and Hong Kong—there is also a more mature clientele looking to downsize from larger family homes into single-floor condominiums.
As interest increases, Zeger noted that savvy buyers recognize the lack of new luxury developments on the horizon, prompting immediate action before potential opportunities dissipate.
He concluded by stating that these buyers feel confident; they have the financial means, perceive current prices as advantageous, and are eager to seize the moment in a stabilizing market, stating, ‘The price is no object. Give me the best thing you’ve got.’
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