OAKLAND HOUSING MARKET INSIGHTS Kenneth Session
T
he California housing market is one of the hottest in the country. Even with the COVID-19 crisis, the markets in the state of California continue to dominate the airwaves. The Bay Area, in particular, is an interesting market as it has witnessed unprecedented growth in the past few years thanks to the massive tech companies in the area and a population explosion. These two factors have been the primary reasons for the growth in the region. Taking center stage of this dynamic, the Oakland city.
For a while now, the demand for rental property has been at an all-time high, and this trend might continue for a while. We might indeed see a massive outflow of renters from the Bay Area given the fact that tech companies are giving their employees the option of working remotely, but it will not change the fact that rental units will be in demand. Half of the properties in the Oakland city are occupied by renters. Looking into the foreseeable future, Oakland city will continue being a rent-driven city. Moreover, renters cannot move into the neighboring cities like San Francisco as they are high priced.
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Additionally, when looking back to the last two years, home prices in the region in 2018 were rising rapidly until cooling off in 2019, and comparing these two years, prices for homes in the region plateaued in 2019 compared to trends in 2018. In 2020, home prices are cooling down, thanks to the Coronavirus pandemic. It is a neutral market, according to Zillow, with the median home value being $801,072. Compared to 2019, home values in the region have gone up 5.7%, and Zillow predicts that they will fall -1.1% within the next year. The median list price per square foot in Oakland is $525, which is actually higher compared to the San Francisco-OaklandHayward Metro, whose average is $499. Also, the median list
price for the homes in Oakland is $689,99, while the median sale price of homes sold in the area is $756,800. Last year, it was actually predicted that the tech companies would continue its rapid expansion into the city, but given the current public health pandemic, this might take a while. Oakland city is home to a number of tech companies, and among them include; Uber, Marqeta, and Hounds Labs. As the room for expansion becomes scarcer in the San Francisco market, companies are looking to break new grounds, and the east Bay Area seems like a reasonable place to start. An increasing number of developers are starting a campaign meant to incentivize the big tech
THE POWER IS NOW MAGAZINE | JULY 2020
