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 

Long-Term Median House Sales Price Trends –
Alameda County. Using a six-month-rolling average of Alameda County monthly median sales prices smooths out monthly fluctuations to illustrate broad, long-term appreciation trends with more clarity.

The greater Oakland-Berkeley Inner East Bay region has been out-performing Alameda County in the last year or so – with prices ticking higher – as illustrated in the second chart below.

This chart uses 4 cities as an example, but the trends apply to all 8 cities – in the region where northern Alameda County meets N.W. Contra Costa County – in our Inner East Bay market.

Sales & Median Values by City and Selected Oakland/Berkeley Neighborhoods

When looking at the median prices and median $/sq.ft. values below, remember that median house size can vary enormously between the different areas listed – and that, though other factors play big roles, all things being equal, a much smaller house will sell for a higher $/sq.ft. value. How these values apply to any particular home is unknown without a specific comparative market analysis.

Seasonal Trends in Market Activity

A dramatic illustration of the role of seasonality in the real estate market. Starting in November activity begins to plunge towards the mid-winter nadir. Remember that November sales mostly reflect October accepted-offer activity. Activity usually hits bottom in December, which then typically makes January the month with the lowest number of closed sales.

Sales vs. Listings for Sale by Price Segment

In virtually every other market in the Bay Area, there are significant imbalances in supply and demand in certain price segments, typically the highest-price ranges. But the greater Inner East Bay market remains remarkably balanced in comparison, and here the lowest price segment (under $500,000) has the somewhat weaker dynamics vis a vis the percentage of sales vs. the percentage of listings for sale. The higher price segments remain very strong.

Homes Selling for $1.5 Million+ by Month

Homes in the higher price ranges are a much better value in this region than in San Francisco across the bay, keeping demand strong.

Market Dynamics by Price Segment

All our price segments have strong dynamics relative to other Bay Area markets (or historical markets), but the demand for homes between $1 million and $2m is amazingly strong – on average, these homes are selling very, very quickly at tremendous percentages above list price.

Percentage of Sales Selling
without Prior Price Reduction

The 2 following charts illustrate comparative year-over-year market dynamics as well as market seasonality within the calendar year.

Ratio of Withdrawn (No-Sale) Listings
to Listings Sold

The ratio of listings withdrawn from the market, to sold listings – one indicator of pricing and buyer demand – ticked up in November 2018 – January 2019, but did not see the huge year-over-year jumps some other Bay Area markets experienced. Based on prevailing dynamics, we do not currently expect a large change in the inner East Bay market in the next few months.

People Moving in & out of CA in 2018

According to new census estimates, approx. 501,000 people from other states moved to CA in 2018, while 691,000 Californians relocated to other states – a net loss of 190,000. In addition, an estimated 284,000 foreign nationals moved into CA from outside the country. (Foreign out-migration numbers are not available.)

The top states for out-migration are Texas, Arizona, Washington, Nevada & Oregon, states with high-tech centers of their own and/or no state income taxes, and/or significantly lower housing costs – thus attracting working residents, local businesses, and retirees. Updated Bay Area figures are not yet available, though migration trends here have generally paralleled state trends in recent years.

The situation in our Inner East Bay region is somewhat different, affected by the migration of residents from much more expensive San Francisco (and, to a lesser degree, from San Mateo County).

Home Prices by City & Neighborhood; Migration In & Out of Alameda & Contra Costa Counties; Price Reductions; Supply & Demand Statistics.

After the heat of the spring market, activity typically slows down markedly in July and August. In September, listings start pouring on the market again to fuel the relatively short autumn selling season. What occurs in the next 2-3 months will be the next major indicator of market conditions and direction.

Median Home Price Appreciation Trends

Except for Piedmont, whose median house sales price was basically flat at about $2,300,000, all the other cities included in our Inner East Bay market have seen median sales price increases in 2019 YTD over those in 2018, though the scale of the increase varies from tiny to substantial. Full-year 2019 median prices may well vary from those for the first 8 months of the year.

Home Prices by City and City Submarkets

The way the local MLS system breaks out submarkets within Oakland and Berkeley – using zip codes and “map areas” – is not ideal, as they don’t correspond that well to specific neighborhoods. But we’ve included the submarket maps, as well as identifying, as best we can, the submarkets with their predominant neighborhoods.

Migration: People Moving In & Out
of Alameda & Contra Costa Counties

Using new U.S. Census estimates released 8/29/19, this chart attempts to identify U.S. counties, states and international regions with the highest number of residents migrating to and from our county. In the Bay Area, there is a general trend outward from more expensive to more affordable places, while in-bound migration is deeply affected not only by exchanges between Bay Area counties, but people arriving from other parts of the state, country and world. Areas often have large two-way exchanges of residents, as seen between Alameda and Contra Costa Counties.

Foreign in-migration is a huge issue in the Bay Area, but it will be another year before any impact of new U.S. immigration policy on foreign in-migration in 2018 shows up in census numbers.

Longer-Term Trends in Alameda County
Median House Price Values

As illustrated at the beginning of this report, the cities in the Inner East Bay region have generally seen 2019 YTD median home value increases over 2018, as compared to the small declines seen in Alameda and Contra Costa Counties in their entireties – graphed below.

Longer-Term Trends in Alameda and Contra Costa Median Dollar per Square Foot Values

Selected County Market Statistics

The inner East Bay market has been outperforming Alameda and Contra Costa Counties as illustrated in the second chart below, in which the the percentage of listings reducing price is broken out for the 2 counties and then just for Oakland.

The first chart below compares Alameda County supply, the number of active listings on the market, with its buyer demand, as measured by the number of sales. This is a seasonally adjusted graph that smooths out normal monthly fluctuations to provide clearer historical trend lines. Again, for the most recent period, the Inner East Bay market, if broken out, would have a significantly smaller gap between listings and sales.

The percentage of listings reducing price in Contra Costa and Alameda Counties, and then just for Oakland (as an Inner East Bay indicator): For the full counties, the percentages jumped in the second half of 2018 and have remained somewhat elevated since. In Oakland, the increase was much less significant, illustrating its higher-demand market.

The next chart measuring unsold inventory in the 2 counties helps give greater context to market conditions and changes. The ups and downs since 2012 are relatively minor compared to the situation that prevailed during the 2008-2011 market recession, when monthly unsold inventory figures were highly elevated.