As San Francisco home prices climb into the stratosphere, reaching a median price of over $1 million as of May 2014, Oakland real estate continues to climb out of the deep hole it fell into during the recession.
Recently released data compiled by ZipRealty shows Oakland prices increasing 23 percent during the past year, compared to 14 percent in San Francisco and 11 percent in Alameda. Berkeley’s median value declined by $12,000, or just over one percent. Despite that growth, Oakland remains the least expensive of the four cities, with a median price of $478,000, less than half of San Francisco.
“It’s a scramble anywhere you go [to buy real estate] in Oakland and one of the biggest reasons is that the median home price is in the $400,000s,” said Don Cruz Datanagan, ZipRealty’s District Broker for the East Bay. He said that investors are still a factor in the Oakland real estate market despite rising prices. “When you are an investor who is thinking long term,” he said, “Oakland certainly has those opportunities [for return on investment].”
Oakland’s most expensive zip code, 94611, which encompasses Piedmont Pines, Grand Lake, Glen Highlands, Shepherd Canyon and Merriewood, had a median price of $795,00, a two percent decline from last year. By contrast, San Francisco and Berkeley saw tremendous growth at the upper end of their price ranges, with San Francisco’s priciest zip code topping $3 million and home prices increasing by 133 percent in another high-end neighborhood.
“A number of up-and-coming neighborhoods in Oakland are really on the rise as more people get priced out of San Francisco and more affluent East Bay communities, like Berkeley,” said Stacey Corso, a spokesperson for ZipRealty. “Home buyers are flocking to far east and far west neighborhoods of Oakland in search of better real estate deals.”
The three fastest growing Oakland zip codes, where prices rose nearly 50 percent in the past year, are in Deep East, near the San Leandro border, and in West Oakland. All had median prices lower than the citywide figure.
Put together, the numbers begin to paint a picture of a sorting that’s happening in the Bay Area, with middle-income people and young families flocking to Oakland as San Francisco and Berkeley real estate becomes increasingly pricey.
“Most of my homebuyers are first time homebuyers. That’s regardless of price point. If they’re selling they’re leaving and if they’re buying they’re new.”
– Martha Hill, real estate agent with Pacific Union
“It really reflects what I believe is a pretty intense San Francisco population coming our way,” said Hill.
America Foy of Sotheby’s International Realty agrees, with the qualification that he believes the effect is limited to specific neighborhoods. “Anywhere where you can walk,” he said, mentioning Elmwood, Rockridge, Mosswood, and the MacArthur BART area. “If you can’t get on the Google bus or go downtown or walk to a restaurant, the market is flattening,” he added.
Both Hill and Foy believe the Fruitvale will be one of the next booming neighborhoods, with its great access to BART and wealth of local restaurants and shops.
For young couples before they have children, Oakland “is really the place to be,” Foy said. With prices starting at below $200,000 in some neighborhoods, Oakland real estate remains one of the best deals in the Bay Area.