‘Uncool’ San Francisco neighborhood set to transform into booming property hotspot after controversial ruling

The Outer Sunset, a once overlooked San Francisco neighborhood, is poised to become a real estate hotspot after the passage of a controversial ballot measure.

The November initiative will permanently close a two-mile stretch of the Great Highway, paving the way for transformative change – and potentially skyrocketing home values.

Located along Ocean Beach on the western edge of the city, the Outer Sunset has long been known for its laid-back atmosphere and eclectic charm. The streets are lined with colorful Doelger homes, modern mansions, and even a handful of historic earthquake cabins from 1906.

With its relative affordability compared to other San Francisco neighborhoods, the Outer Sunset has steadily grown in popularity, especially among buyers drawn to single-family and multi-unit homes close to nature and outdoor amenities.

This appeal is set to grow further with a new ballot initiative poised to transform the Upper Great Highway into a sprawling oceanfront park.

Proposal K, backed by several city supervisors, would open the portion of the highway between Lincoln Way and Sloat Boulevard to vehicular traffic.

The project was approved by the California Coastal Commission on December 12 and is expected to be completed in early 2025.

The park aims to improve pedestrian and cyclist access, improve safety and restore critical coastal dunes.

Local real estate agent Dimitris Drolapas, a lifelong Outer Sunset resident, believes the new park could create a real estate boom similar to the “halo effect” seen with New York’s High Line.

When the High Line debuted in 2009, it transformed the area into a dynamic outdoor destination, causing property values ​​to skyrocket.

Drolapas expects the park’s increased pedestrian traffic and outdoor attractions will attract more businesses and shops, fostering a vibrant local economy.

“If you have more foot traffic, then you have more people who have to live in the immediate area because you’re kind of creating your own local economy,” he said. SF port.

Developers are already looking at opportunities in the Outer Sunset. A 22-story, 446-unit residential complex has been proposed at 2700 Sloat Boulevard, although the project has been criticized for its height and proximity to the ocean.

Coastal communities like Carmel-by-the-Sea, known for their prime beachfront properties, boast median home prices of $2.7 million.

In contrast, the Outer Sunset remains relatively affordable, with a median home price of $1.5 million, according to Redfin.

The neighborhood’s appeal has grown even without the proposed park, drawing increasing interest from younger families looking for more budget-friendly options.

Drolapas emphasized affordability compared to areas like Pacific Heights, where median home prices are rising to $6 million.

“If you look at how much a house in Pacific Heights costs, about $6 million, while in Sunset it’s a million and a half,” he said.

“Neighborhoods where it’s cheaper than San Francisco are like Bernal Heights, Glen Park, Excelsior, Bayview… Every other neighborhood is much more expensive.”

Data from the San Francisco Association of Realtors through October 2024 shows a 6.2 percent increase in the number of single-family homes and a 22 percent increase in pending sales year-over-year in the Outer Sunset.

However, apartment sales have struggled, with a 50 percent drop in both listings and pending transactions.

Real estate agent Colleen Cotter, another Outer Sunset resident, noted the neighborhood’s changing appeal, especially after the COVID-19 pandemic increased demand for outdoor spaces and larger homes.

“It’s definitely a much more desirable neighborhood today than it was pre-coronavirus,” Cotter said. ‘There is a strong demand for single-family homes, for more space, especially with working from home, and those homes are moving relatively quickly.’

This marks a significant shift from previous decades, when the Outer Sunset, far from bustling downtown San Francisco, was often overlooked by residents.

While Union Square has struggled to revive post-pandemic foot traffic through government-backed community events, the Sunset neighborhood has seen a different kind of revival.

District Supervisor Joel Engardio’s campaign included the launch of a thriving night market, which immediately attracted thousands of visitors and brought new energy to the area.

The park project, while promising, has generated significant controversy, as many Sunset residents opposed the highway closure out of concern about increased traffic.

Election maps showed that much of the support for the initiative came from neighborhoods outside the city’s west side.

Some locals have even threatened to recall Engardio over his support of the measure.

Engardio defended the initiative, highlighting the benefits for the environment, local businesses and future generations.

“It is also important to note that the movement to create an oceanfront park is being led by Sunset residents. I know many in the Sunset who voted for Prop K,” Engardio said in a speech after on X.

“Like them, I believe a park will be good for the environment, boost local businesses and bring joy to generations of people. It is the best choice for utilizing our limited coastline.”

Both Cotter and Drolapas recognize the potential of the project, but also its uncertainties.

‘I think it can be a huge victory. However, I also think there are a lot of unknowns,” Cotter said.

Drolapas emphasized the need for significant redevelopment of the beachfront properties to truly transform the area.

‘You can’t leave it as it is. “A lot of that beachfront real estate would need to be redeveloped in various ways, combining many stores and building larger buildings,” he said.

For now, the Outer Sunset remains a neighborhood with untapped potential.

As Drolapas put it, “It’s still a great place to live, even if nothing changes.”