San Francisco 'froth is gone' as wealth fades, housing slumps

Abstract

A palatial five-bedroom home built in 1932 with stained-glass windows, hand-carved doors and jaw-dropping hillside views of downtown San Francisco hit the market in April for $9.5 million. "Even big buyers who'd pay cash for a $10 million home are thinking twice. It's the economy, interest rates, the stock market, inflation."San Francisco's economy is already struggling to rebound from the pandemic as remote work proliferates, with tech companies including Twitter Inc. and Salesforce Inc. cutting back on office space. As startups ballooned into unicorns, an influx of tech workers transformed much of the city and pushed home prices up almost 120% in the past decade, according to Redfin. "Prior to the pandemic the majority of my investments were Bay Area based companies, however now most of those companies are remote-first and new investments have been in NYC, LA, Sydney, and other tech cities," said Kimmel, 33.In July, she opened a studio in LA's Silver Lake neighborhood to host speakers, streetwear and foodie events for the startups her firm, Worklife Ventures, seeds with initial investments as high as $2 million. It's stretching even to the wealthiest residents: Hamid Moghadam, the chief executive officer of real estate giant Prologis Inc., was robbed at gunpoint outside his Pacific Heights home in June, an incident he said made him reconsider living and running a company in the city. The last time borrowing costs significantly jumped, in late 2018, San Francisco housing prices were buoyed by anticipated initial public offerings, such as Uber Technologies Inc. and Pinterest Inc., that supercharged the local sense of affluence. Before interest rates surged this year, San Francisco sellers often listed homes for below market prices, a strategy that fueled ruthless bidding wars.