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

The Outer Sunset, a once-overlooked San Francisco neighborhood, is on the verge of becoming a property hotspot following the approval of a contentious ballot measure.

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

Nestled along Ocean Beach on the city's western edge, the Outer Sunset has long been known for its laid-back vibe and eclectic charm. Its streets are lined with colorful Doelger homes, modern townhouses and even a handful of historic 1906 earthquake shacks. 

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 homes and multi-unit properties 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. 

Proposition K, backed by several city supervisors, will the stretch of the highway between Lincoln Way and Sloat Boulevard to vehicular traffic. 

Approved by the California Coastal Commission on December 12, the project is slated for completion by early 2025. 

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

Local real estate agent Dimitris Drolapas, a lifelong Outer Sunset resident, believes the new park could spark a real estate surge similar to the 'halo effect' observed with New York's High Line. 

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

Drolapas anticipates that the park's increased foot traffic and outdoor attractions will attract more businesses and retail establishments, fostering a vibrant local economy.

'When you have more of that foot traffic, then you have more people that need to live in the immediate area, because you're creating like, its own local economy,' he told SF Gate. 

Developers are already eyeing opportunities in the Outer Sunset. A 22-story, 446-unit housing complex has been proposed at 2700 Sloat Boulevard, though the project has faced criticism 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 an average home price of $1.5 million, according to Redfin.

The neighborhood's appeal has grown even without the proposed park, attracting increasing interest from younger families seeking more budget-friendly options.

Drolapas highlighted the affordability compared to areas like Pacific Heights, where average home prices soar to $6 million.

'If you look at how much a house costs in Pacific Heights, about $6 million, whereas in the Sunset, it's one and a half million,' he said. 

'Neighborhoods where it's cheaper than that in San Francisco are like Bernal Heights, Glen Park, Excelsior, Bayview ... Every other neighborhood is way more expensive.' 

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

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

Real estate agent Colleen Cotter, another Outer Sunset native, noted the neighborhood's evolving appeal, particularly after the COVID-19 pandemic heightened demand for outdoor spaces and larger homes. 

'It's definitely a much more desired neighborhood today than it was pre-COVID,' Cotter said. 'There's a strong demand for single-family homes, for more space, particularly with work-from-home, and those houses move relatively quickly.' 

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

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

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

The park project, while promising, has sparked significant controversy as many Sunset residents opposed the highway closure, citing concerns about increased traffic. 

Election maps revealed that much of the initiative's support came from neighborhoods outside the city's west side. 

Some local residents have even threatened to recall Engardio for his support of the measure. 

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

'It's also important to note that the movement to create an oceanside park is led by Sunset residents. I know many in the Sunset who voted for Prop K,' Engardio said in a post on X. 

'Like them, I believe a park will be good for the environment, provide a boost to local businesses, and bring joy to generations of people. It's the best choice for how to use our limited coast.' 

Both Cotter and Drolapas acknowledge the project's potential but also its uncertainties. 

'I think that it could be a huge win. I also think there's a lot of unknowns, though,' Cotter said. 

Drolapas stressed the need for significant reconfiguration of beachfront property to truly transform the area.

'You can't leave it the way it is. A lot of that beachfront property would have to be reconfigured in different ways, combining lots of retail, build bigger buildings,' he said. 

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

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