Densely saturated San Francisco just stepped aside as having the Bay Area’s must-buy property. According to Zillow’s Home Value Index, it’s Oakland—East Oakland—that wins the popularity prize.
By Ramona d’Viola
Forget Bayview, the Excelsior, or San Francisco’s hipper-than-hip Dogpatch neighborhood. The city just stepped aside as having the Bay Area’s most explosive growth in home prices. According to Zillow’s 2016 Home Value Index, it’s Oakland—specifically five neighborhoods in East Oakland—that are expected to have the greatest real estate price appreciation this year.
“Now that Temescal, Rockridge, and Downtown Oakland neighborhoods have begun to peak, areas like Jefferson, Fairfax, and Arroyo Viejo have come online,” says Gimme Shelter agent John Seravic. “For those of us who work here, we’ve seen the tide coming. We knew these neighborhoods would be heating up soon. It’s the worst-kept secret in Bay Area real estate.”
Besides the attraction of better weather and “affordable” prices, Oakland has long appealed to young, creative entrepreneurs and their families, many of whom migrated from congested, expensive San Francisco. What’s new is that homebuyers’ interest has turned toward several neighborhoods once considered unsavory, if not unsafe, by many buyers and agents alike.
Largely unheard of, and unfamiliar to even longtime residents, these newly in-demand neighborhoods, which also include Old City, Oak Knoll-Golf Links, Havenscourt, and Cox, are all in East Oakland below the Interstate 580 corridor. What they have in common is affordability—and proximity—to appeal to youngish buyers looking to get into the Oakland market at not-quite-sky-high prices.
The predictions emerged in Zillow’s “Hottest Neighborhood” predictions for 2016. Of the top 200 metro areas throughout the nation, the San Francisco Bay area ranked 22nd in home-value growth. But within the nine counties of the San Francisco metro area, all five of the neighborhoods projected to be hottest were in East Oakland. Predictors include tracking median home values in geo-targeted areas year-over-a-year, income, and unemployment rates.
According to Zillow, Jefferson, Fairfax, and Arroyo Viejo saw upward of 8 percent increases in property values in the past two years, while Old City, Oak Knoll-Golf Links, Havenscourt, and Cox have reached 7-plus percent home value growth.
“It was really a grassroots movement of artists and entrepreneurs who discovered Oakland’s diversity and richness,” Seravic said. “Sure, there’s a lot of tech money, but Oakland has a much more diversified business environment and a thriving entrepreneurial artist community. People came here and realized they could start something here, and have an affordable life.”
With home listings in these burgeoning neighborhoods approaching or exceeding the half-million-dollar mark, affordability is in the eyes of the buyer. As the San Francisco influence makes its way to the East Bay, this trend of a “uniformly expensive” Oakland has its consequences—not all positive.
According to the U.S. Census Bureau, Oakland has seen a 35 percent increase in its white population since 2000, and a 28 percent decrease in the African-American population. Oakland’s rapid and ongoing rise in home values predicated the largest increase in rental prices since 2014, with some as high as 20 percent year over year and is exceeded only by the New York City borough of Brooklyn. Coupled with low inventories, it’s a seller’s and a landlord’s market.
“Oakland’s is a really nice place to live,” says Seravic. “It just took a while to get out of San Francisco’s shadow.”
Reprinted from Oakland Magazine
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