A Closer Look Into The San Francisco/Oakland Greater Bay Area Housing Market
May 5th 2016 Written By: Tyesia Hunter
The San Francisco/Oakland Bay Area real estate market is one of the most desirable and profitable housing markets in the country. The average median home is priced at $620,000. Investors from all around the country and the world (primarily from China) look for inventory here to solidify their portfolios and grow their money. From the sheer investing perspective this is the place to be, they seek to own homes in the rolling hills overlooking the Bay with views of the Golden Gate bridge, Alcatraz and much more. From Berkeley to San Jose, Marin County to San Joaquin County, they search for that prized home with ALL CASH OFFERS! We will looking at the market in 3 phases: The Good, The Bad and The Ugly.
The Good: With foreclosures leveling off and short sales becoming nearly extinct, the ones holding the golden nuggets are the home owners. Knowing that the hunt for home scouting is on for properties, the owners hold out for a kings ransom. As a result a sticky situation occurs, investors still want DEALS! So as the higher end homes stay on the market longer, the investors begin to scout in other Bay Area markets. Its like when Mark Cuban wanted to buy the Chicago Cubs, the sellers did not want to sell to him at his price so if he wants into the market called MLB (Major League Baseball) he will look into a less expensive market and purchase a team like Oakland Athletics. The Athletics as not worth as much as the Cubs, but with the right management and appreciation they will become a great investment! This is the current state of the Real Estate market here. Let us take a look at Alameda County as a prime example, the ave. list price week ending April 27th 2016* is $1,538,330 in the area code 94539 (Fremont, CA) and the lowest being $272,393 in the area code 94603 (Oakland, CA). That is just the listing price and with competition so high, multiple offers are often the case, making the final sales price anywhere to 5% higher then asking. Either way the investor come out on top!
The Bad: Zooming in closer to the dynamic of investors coming into less expensive cities such as Oakland, a domino effects starts to take place. The median income of a resident in the city of Oakland is $52,962,** with only 39% of the homes being owner occupied. This shows that the majority of residents rent in the city. Now that Oakland home owners know that their homes are now in high demand, they have a choice to make. With rising appreciation comes the opportunity for higher rents. Looking at the Bay Area landscape in its entirety, you have the south bay known as Silicon Valley, and San Francisco across the bay bridge from Oakland. Both areas are within 40 minutes of Oakland, as to say the aforementioned cities have extremely high rental cost. So what city would be a landing spot for these techies with big money……you guessed it, Oakland! The owners see dollars signs, so they have to get their current tenants out at all COST! According to a Mercury News article titled: Evictions soar in Alameda County as rents rise, currents tenants are being told to pack up and make way for the new money. What these owner see down the road is a chance to rent to the new wealthier class of tenants for about 2 years then eventually sell their homes and pocket their retirement cost.
The Ugly: At the end of the day/transaction, the ones in the wind are the former tenants. They will be forced to move to the outskirts, where their rents will be cheaper. But the downside is, they will be surrounded by section 8 housing residents and forced to make longer commutes to those same areas that they were forced to leave from. This in all is the double edged sword of a hot real estate market, you have been warned!
Contact Tyesia Hunter at (408) 337-2133 http://www.sellyourcaliforniahousefast.com/ email: email@example.com