San Francisco’s real estate market has experienced a noteworthy shift. According to city data for the 2022-2023 fiscal year, transfer tax revenue, a significant indicator of both residential and commercial sales, has plummeted. The city recorded only $186 million in transfer tax revenue, a dramatic 64% drop from the $520 million raked in the previous fiscal year. This decline underscores the volatility of the General Fund’s income and affects the city’s overall budget, making it a concern for both property owners and policymakers.
Several contributing factors are at play, from fluctuating interest rates impacting large-scale commercial transactions to changing work-from-home dynamics. Even the residential market isn’t immune, as demonstrated by the dwindling home sales numbers in the first half of 2023. As interest rates continue to rise, the once-red-hot housing market has cooled, affecting not only the quantity of sales but also the city’s transfer tax revenue.
With this decrease in transfer tax, it’s evident that San Francisco’s real estate is in a state of flux. Both commercial and residential segments of the market have been impacted, and this likely has consequences for future city budgets. It’s a critical moment for investors, policymakers, and everyday San Franciscans, who may need to recalibrate their expectations and strategies.
Should you have inquiries regarding the San Francisco or Marin real estate landscapes, we invite you to engage in a confidential consultation with Salma & Company, where five decades of expertise await your discernment.
Disclaimer: This blog post is a summary of an article originally published in the San Francisco Business Times. The full citation can be found at the end of this post.
Source:
Andersen, T. (2023, August 23). “S.F.’s transfer tax revenue falls to lowest level in more than a decade.” San Francisco Business Times. Full Article