Why an SF mansion just sold for $10M under asking

Just over a year ago, a nearly 11,000-square-foot Russian Hill mansion in San Francisco was listed for sale. For the five-bedroom, eight-bathroom home with sweeping Bay views, a $20 million price tag was high, but nothing out of the ordinary. 

But in November, after several price cuts throughout 2023, the home at 2626 Larkin St. sold for $10 million — a whopping $10 million less than both its list price and what it sold for in 2020. 

Nina Hatvany, the Compass listing agent who represented the seller, said oftentimes the end of the year can be a good time to buy a home since some sellers may be motivated to offload their property before year’s end. If they’re going to take a loss, they can write it off on that year’s taxes, but more so, she said she feels like the end of the year can weigh on a seller psychologically. “They want to know it will be resolved by the end of the year,” she said.

San Francisco median home sale prices have been falling steadily, down to 2018 levels of just below $1.6 million so far this year, according to recent data from Compass. Overbidding is still common, though. In its November report, Compass said homes have been selling for an average of 7% over the asking price in San Francisco, while condos typically have been selling for about 2% less than the asking price. Those numbers have stayed fairly constant since March 2023, but data on how much those numbers may have increased or decreased recently won’t be available until the new year. 

Hatvany said her team has seen an uptick in sales in the past three to four weeks and amid a tough year: “It’s nice to see closed sales.” Winter typically sees a slump in sales activity overall, with overbidding slipping to its lowest point in the year. In January 2023, the percentage of homes selling above the list price was just over 30% — less than half of the nearly 75% of overbids in April 2022. 

It’s unclear if extreme underbidding will continue in 2024. Another of Hatvany’s listings — 840 Powell St. Apt. No. 501 — sold for $1 million under asking last week. The four-bedroom, three-and-a-half-bathroom Nob Hill condo was priced at $3.3 million in March 2023 and closed last week for $2.2 million. “These buyers came along and made a lowball offer and the seller really wanted to move on,” Hatvany said.

The condo market in San Francisco especially has been struggling, but it’s still unusual for a unit to sell far below what it sold for more than 15 years ago. 2222 Hyde St No. 1, in which Havatny represented the buyer, sold at the end of October for $2.4 million — in 2006, it sold for $2.9 million.

“Some of the prices we’re seeing are quite extraordinary,” Hatvany said.