According to Inside SF, a fully renovated Pacific Heights TIC flat listed at $2.3 million has three bedrooms, three and a half baths, and parking. Pacific Heights condos average closer to $3.2 million, a nearly million-dollar difference.
The gap has nothing to do with the kitchen. It has to do with what's recorded at the county.
San Francisco runs two parallel ownership systems for multi-unit buildings, and most buyers scrolling listings never notice which one they're looking at until an agent or a lender points it out. One is a condominium: a legally separate parcel. The other is a tenancy in common, usually shortened to TIC: ownership of a portion of a single parcel, as described by the San Francisco Assessor-Recorder. You don't own a unit. You own a percentage of a building.
That legal difference, not square footage or finish level, is what produces the price gap. And the size of that gap is a lot less stable than the listings make it look.
What the June 2026 numbers actually show
From January through May 2026, 120 TICs sold across San Francisco at a median price of $1.2 million. Ninety-three of those were in buildings with three or more units, and they closed at an average of 7.5 percent above list price, which tells you TIC demand in 2026 isn't soft. It's competitive within its own lane.
Where that demand concentrates says something too: Noe Valley and Eureka Valley, the Mission and Mission Dolores, the Marina, and Nob Hill and Telegraph Hill, all neighborhoods where condo prices already run high and a TIC is often the only way in without a seven-figure jumbo loan. The single highest TIC sale in that five-month stretch was a two-level penthouse at 430 Greenwich in Telegraph Hill, three bedrooms, three baths, two-car parking, a private elevator, and a copper soaking tub, which closed above $2 million. That sale alone is worth sitting with. Nobody buys a penthouse with a private elevator because they're settling for less. They bought a TIC because that was the ownership structure attached to the building they wanted, and the price still cleared two million dollars.
The unit wasn't discounted. The paperwork was.
Condo or TIC: what actually changes
| Condominium | Tenancy in Common | |
|---|---|---|
| Title | Legally separate parcel | Share of a single parcel |
| Financing | Conventional or jumbo, broad lender pool | Fractional loans from a small pool of specialized lenders |
| Typical rate | Standard market rate | Often 0.5 to 1 percentage point higher |
| Down payment | Standard conforming guidelines | Usually larger, lender-dependent |
| Resale pool | Full buyer pool, including FHA/VA where eligible | Narrower, financing-limited buyer pool |
The financing row is where the real story lives. A TIC buyer is often working with a handful of portfolio lenders who underwrite the specific building's TIC agreement before they underwrite the borrower. Same price, completely different competitive landscape for the loan.
Why the discount refuses to sit still
Ask five people how much cheaper a TIC runs compared to an equivalent condo and you'll get five different answers, and that's not sloppiness. Estimates in the current market range from roughly 5 to 15 percent on the low end up to 15 to 30 percent for less liquid buildings, and the spread is real because the discount isn't a fixed neighborhood characteristic. It's a floating risk premium tied to how many fractional lenders are actively writing loans that month, how clean a specific building's TIC agreement reads to underwriting, and how comfortable that lender's credit committee feels about resale liquidity in the current rate environment.
That's the piece a portal search can't show you. A listing that looks 20 percent cheaper than the condo three doors down might reflect a well-drafted TIC agreement and a lender who knows the building, or it might reflect a shakier agreement that only one or two lenders in the city will touch. The percentage on paper doesn't tell you which.
The conversion math only works if you own half a building
A lot of TIC buyers assume the discount is temporary, that the building will eventually convert to condos and the value gap will close on its own. For two-unit buildings, that assumption has real footing under the San Francisco Subdivision Code. It still takes a licensed surveyor, an attorney experienced in conversions, and typically six to twelve months from application to a recorded final map, sometimes twelve to eighteen if the building has outstanding violations. But it's a predictable path.
The economics reward the wait. In comparable two-unit buildings in Noe Valley and Cole Valley, a unit worth roughly $1.1 million as a TIC has traded for $1.15 to $1.27 million after conversion, a per-unit gain of $50,000 to $170,000 against a conversion cost that typically runs $15,000 to $40,000.
Buildings with three to six units don't get that path. The annual conversion lottery has been suspended since 2013 under Section 1396.5 of San Francisco's Subdivision Code.
What to check before you write an offer
- Count the units in the building; conversion options can depend on building size.
- If you're considering a conversion for a two-unit building, ask how long the other owner has occupied their unit and whether it has ever been rented.
- Get pre-approved specifically for a fractional loan before you write an offer. A generic mortgage pre-approval doesn't confirm a lender will accept this building's TIC agreement.
- Read the recorded TIC agreement itself, not a summary.
- Ask about the building's eviction history.
Quick answers
Is a TIC always cheaper than a comparable condo? Usually, but not by a fixed amount. The gap reflects financing friction that month, not a discount baked into the neighborhood or the unit.
Can I use a standard 30-year mortgage on a TIC? No. TIC purchases go through fractional loans from a small pool of specialized lenders, typically at rates half a point to a full point above comparable condo financing.
Will my TIC automatically become a condo someday? Not automatically. Conversion depends on the building and the applicable process.
Does a lower TIC price mean the building has problems? Not necessarily. The Telegraph Hill penthouse that sold above $2 million had a private elevator and a copper soaking tub. The price reflected the ownership structure, not the finish.
If you're weighing a TIC against a condo in San Francisco, the right call depends on your timeline, your lender options, and what that specific building's paperwork actually says, not on a percentage you saw in a listing description. Jose Diaz can walk through the numbers on a specific address with you and help you figure out what you'd actually be buying before you write the offer. Schedule a consultation to get started.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
