The tide is slowly changing for the outrageously-priced greater Bay Area real estate market. The world of investing in real estate and purchasing homes continues to shift. Proposition A recently passed, providing a sum of $600M in bonds for affordable housing in San Francisco. Requiring a 2/3 majority to pass, the measure garnered 69.34% support and was ratified by Mayor London Breed and members of the Board of Supervisors. The bond directs the city to prioritize affordable housing options for low-to-middle-income households. A focus on the disenfranchised ‘sectors’ is helping to drive up investment in these communities. It is also stabilizing costs by curbing runaway rental prices.
Rising rental prices have been the mainstay of the San Francisco real estate market for many years. However, mid-year reports provide interesting insights into the changes that are taking place in the industry. Since January 2019, just one city in the Bay Area has seen its rental prices decline. The median market rental in San Francisco is $3,697 p/m, Palo Alto rentals average $3,857 p/m, and in Cupertino rentals average $2,829 p/m. These figures are especially high. In the heart of Silicon Valley, in Menlo Park the median housing rental is $4,638 p/m. Continue reading to learn more about the transforming Bay Area real estate market.
Oakland Real Estate Market Status
Oakland California is a desirable market, and neighbor to San Francisco. While San Francisco remains the economic, social, and cultural powerhouse of the region, the greater Bay Area is also benefiting from tremendous employment growth, housing market expansion, and economic vitality in the region. Since the 2009 recession, the Oakland economy has enjoyed tremendous success. Widespread construction initiatives are currently underway with many new developers entering the scene.
Moreover, the housing market has grown substantially in Oakland California. The Federal Housing Finance Agency (FHFA) reported strong growth in home prices across Oakland. This can effect the real estate value and market outcomes. Real estate studies reveal that the median house price in Oakland is $520,000, substantially less than neighboring Bay Areas in San Francisco, particularly the Berkeley area which has a median home price of $918,000. In the East Bay region, Oakland played second fiddle to Richmond in terms of most affordable median real estate prices, at $330,000.
The median listing price in Oakland is $500,000, with a median sale price of $543,000. Over half of residential dwellings in the city are owner occupied, 38% are rented, and 8.6% are vacant. A typical studio apartment rents for $1,039 per month, 1-bedroom apartments rent for $1,260 per month, 2-bedroom apartments rent for $1,585 per month, 3-bedroom apartments rent for $2,213 per month, and 4-bedroom apartments rent for $2,716. Based on statistics, the 1-year appreciation rate of property in Oakland is 13.4%. The unemployment rate is 5.9%. Additionally, the median household income is $51,683.
As the fifth largest economy in the world, California attracts huge numbers of immigrants and workers every year. Silicon Valley companies like Facebook Inc, Alphabet Inc, Apple Inc, and others are responsible for creating hundreds of thousands of new jobs since 2009. Housing demand exceeds supply by a substantial margin and experts estimate that 3.5 million new homes will be needed by 2025 to meet current demand.
New Developments In Oakland Housing Market
Furthermore, real estate experts forecast positive growth for the Oakland housing market through Q3 2021. Real estate developers are implementing innovative construction techniques to transform Oakland’s housing market. Their way of building and remodeling apartments makes use of adaptable units – MacroUnits – with flexible wall systems. These ‘Magic Walls’ transform 1-bedroom/2-bathroom apartments into apartments with multiple bedrooms.
These types of units are being offered to customers below market price. Several large-scale projects have already been rolled out, including 674 23rd Street. Danny Haber revolutionary project is gaining attention from locals across Oakland. By providing housing to middle-income earners, developers are helping to turn the tide in the greater Bay Area. These repeatable designs are mass produced off-site, saving money in the process. By bringing products to market quickly, construction and development is taking place at rapid speed. Additionally, cost savings are being passed on to consumers in the form of lower rentals.