There is a lot going on in the world right now and we won’t pretend to know how things will turn out or affect the local real estate market over the next few months. In the meantime, this report will look at the most recent data available, though the impact of the wild volatility in the financial markets and the unfolding situation with the coronavirus has yet to show up in reliable statistics. Typically, the spring selling season is the most active of the year.

One positive for real estate is that mortgage interest rates hit a historic low in early March, as illustrated below, and rates play a huge role in housing affordability.

Long-Term Median Home Price Trends

Generally speaking, very similar appreciation trends in the communities of this region, going back to 1996. It is true that less affluent markets experienced larger bubbles and larger crashes in 2002-2011 due to their greater exposure to subprime lending practices. However, all these cities have seen very dramatic recoveries since 2012.

We broke out Piedmont on this separate chart below because otherwise its much higher median sales price would flatten out the lines in the chart above.

Mortgage Interest Rates Hit Historic Low

Home Sales Breakdown

Home Values & Statistics by City
& Selected Neighborhoods

Selected Market Indicators

The first 2 of the next 4 charts illustrate both general market trends in demand, and the large role of seasonality on market activity.

Regarding the next 2 graphs: Since mid-2018, the Inner East Bay has generally outperformed the overall performance of the counties in which they are located, Alameda and Contra Costa. However, these are still good illustrations of general market trends over the last 10 years.

Generally speaking, after years of high appreciation rates, annual 2019 Bay Area median home prices went down a little bit, went up a little bit or basically remained unchanged as compared to 2018. The Inner East Bay house market went up the most, outperforming all other major Bay Area markets.

For 2020, economist Ken Rosen at UC Berkeley has said he expects the Bay Area median price to remain basically flat, within a general range of up or down 2% – in other words, similar to what happened last year. We can’t predict the future, but that doesn’t sound unreasonable, and happily avoids the sensationalism of many other media-grabbing forecasts. Of course, it is certainly possible that the greater Oakland-Berkeley area will continue to exceed the general-region appreciation rate.

Median sales prices are generalities and not exact measurements of changes in fair market value. They can be affected by a number of factors and are sometimes subject to anomalous fluctuations. How they apply to any particular home is unknown without a specific comparative market analysis.

The Inner East Bay tracked the general Alameda County trend line (below) until this past year or so, when it continued to see median home price increases while the county as a whole saw year-over-year declines.

Oakland is now seeing a boom in new housing construction, exceeding that in San Francisco. The increase in new apartments and condos being built may affect the supply and demand dynamic in those segments, ameliorating future price increases.

Economic Factors Affecting
Real Estate Markets

While many local counties are experiencing increasing out-migration of residents and businesses due to a number of issues (including housing costs), the Inner East Bay remains a big destination for people relocating from San Francisco (where the median house price is $1.6 million). The relative affordability of its housing is a major factor in this dynamic.

By number of sales, Alameda County is the largest market in the Bay Area. The greater Oakland-Berkeley region constitutes the largest market within the county.

Bay Area vs. U.S. Appreciation Trends

This next chart estimates percentage home price appreciation trends for the San Francisco metro area (red line) and for the country as a whole (green line). In the latest market up-cycle, which began in 2012, the divergence in trend lines is very dramatic. The chart does not delineate prices, only percentage changes based upon a January 2000 value of 100. Thus 260 = 160% appreciation since January 2000.

Market Seasonality – New Listings Coming on Market 

The market is currently in the midst of its annual plunge in new listing activity, which hits bottom in December. (This chart is updated with data through October. November saw its typical big drop in listing activity.)

Estimated Home Price Trends since 1996

The next 3 charts are based upon the calculations of an algorithm which estimates – in a smoothed out, seasonally-adjusted trend line – changes in median home values. According to its calculations, prices in some of our more expensive markets have dropped from recent peaks – a common phenomenon around the Bay Area.

Market Dynamics by City or District

As often mentioned in previous reports, many of our cities and districts display statistics indicating them as some of the highest-demand markets in the country.

Regional Market Statistics