Oakland-Hayward-Berkeley Housing Market 2018
With demand spilling over from Silicon Valley, the Oakland market and other neighboring cities and towns will see rising prices through 2019. And if the Bay Area or California economy or market should slide a little in 2019, you might have the best opportunity to buy then. There is political and economic turbulence and transitioning going on which may mean 2019 might be the only year if any, where prices stagnate.
Oakland Housing Prices Rise
Homebuyers need a household income of $274,000 now to buy in the Bay Area. Good news for them is recent home listing price cuts of 7% to 9% which are happening. However, that’s less than other metros regions, and the US-wide average of 14.2%.
There’s word that buyers are a little fatigued about competing and house hunting in the Bay Area.
The value of buying in Oakland might depend most on the overall US economic outlook. The latest volatility and lack of housing availability has home sales falling in Los Angeles, San Francisco, San Jose, San Diego and other areas in California. Prices however held steady or just down slightly in September across California.
Prices in East Bay have soared and with limited availability, buyers are looking elsewhere to find their new home and/or to rent. Fruitvale, Millsmont, and Richmond are the up and coming communities for buyers.
The average home price is selling for $738,400 according to Zillow and it’s expected to rise 6.7% to $787,000 next fall of 2019. Single detached home prices have risen 4.8% from last year to $781,000. DOM is at a record low 38 days. Multiple offers on homes for sale is common. Zillow also says the average rent price in Oakland is $3025.
According to CAR, the average home price fell $60,000 to $900,000 in September. That’s a MTM change of -6.3% and YTY% change of -10.4%.
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Oakland Multifamily Market
Local Oakland Economy and Employment is Strong
According to HUD, Nonfarm payrolls are a full 5% higher now than in pre-recession days and they predict an increase of an average of 29,600 jobs, or 2.6% each year to 2020.
In September, according to the latest State of California report, the unemployment rate in the Oakland-Hayward-Berkeley MD fell to 2.9% from a revised 3.1% in August 2018, and below the year-ago estimate of 3.4%. That is much lower than California’s very low unemployment rate of 3.9% and US rate of 3.6%. Unemployment is 2.8% in Alameda County, and 2.9% in Contra Costa County. Stats courtesy of employment development department.
Rising Population Feeds Demand
Population in the Oakland area is expected to rise 30,000 every year.
net in-migration to the more suburban Contra Costa County is a significant factor in population growth in the county. Average annual net in-migration of 8,000 people into Contra Costa County accounted for a larger share of population growth, at 62 percent, compared with 51 percent, or average annual net in-migration of 10,300, in Alameda County” – from USHUD COMPREHENSIVE HOUSING MARKET ANALYSIS report on Oakland-Hayward-Berkeley, California.
Rental Market in Oakland Under Pressure
Housing affordability and availability are top issues in the Oakland market. Rental market conditions are tight as well. The apartment rental vacancy rate is down to 2.7% which is well down from 6.6% in 2010. There is demand for 19,600 units with only 4325 units under construction.
Much like Sacramento, the success of the tech sector in San Francisco/San Jose, has spilled over into Oakland. Zillow quotes the average rent price in Oakland at $3025.
Best Neighborhoods to Buy in Oakland
Niche.com has offered its ranking of best neighborhoods to buy in Oakland. Here are there top ten picks:
1. Rincon Hill
3. Central Waterfront
4. Candlestick Point
5. Clarendon Heights
6. Forest Hill
7. Balboa Terrace
8. Monterey Heights
9. Noe Valley
10. Upper Market
You can read more on the niche.com website.
For homeowners looking to sell in Oaklands most trendy, high rated neighborhoods, it’s still likely to be a multi-bid, high over-asking price situation.
The hot California economy and intense housing shortage, ensures big demand and prices will continue. Rents are rising in San Jose and San Francisco and you’re likely to get your asking rent price. However, cap rates are lower at around 5.0, rent to price ratios are high, and that makes it more difficult to make a profit than other cities in the US.
For local California property investors, Oakland’s neighborhoods might represent some of the most promising districts in the Bay Area.
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