Oakland, Berkeley, Piedmont

& City of Alameda

Looking Back on the 2018 Real Estate Market

Compass January 2019 Report

There were almost too many local, national and international political, economic, social and ecological factors impacting the 2018 market to count. In summer/early autumn, real estate and financial markets began to shift distinctly cooler, but of Bay Area markets, the greater Oakland-Berkeley market has so far changed the least. Looking at 2019, there are many wild cards whose impacts are difficult to predict: extremely volatile financial markets, fluctuating interest rates, contentious national politics, international trade issues, spiraling debt levels, migration trends, employment growth - and a dramatic surge of local high-tech unicorns that plan to go public, which could create a tsunami of new wealth in the Bay Area.

Alameda County: Annual Median Price Trends

Quarterly Median Price Trends

Other Bay Area markets have generally seen more substantial drops in median prices since Q2 - and it's not unusual for median prices to drop in the following quarters. The region also maintained the highest Q4 year-over-year appreciation rate - 6.8% as illustrated in the second chart below - of any of the other local markets. (Piedmont is not included in these 2 charts, because its prices are so much higher, but its values and appreciation trend are covered later in this report.)

Home Sales Breakdowns

Selected Market Indicators

These next 2 charts are good illustrations of how seasonal listing supply and buyer demand usually are. December and January are very low-activity months, and our next significant indication of where the market is going will probably be after the early spring selling season begins.

Average days-on-market fluctuates by season, but remains low by historical standards and compared to most other markets.

Months-supply-of-inventory (MSI) has fluctuated over the months - which is normal - but has generally remained in a band that would be considered to reflect a seller's market.

Two of the more distinct signs of changes in the market have been the increase in price reductions (the first chart below) and in listings being withdrawn from the market without selling (second chart). Most other Bay Area market regions have seen more dramatic spikes in these two metrics.

Oakland and Berkeley have big markets for 2-4 unit buildings, and as illustrated in this chart for Alameda county, values have been consistently climbing since 2011.

Higher priced home sales have held up quite well through the end of the year after hitting a new peak in sales volume in Q2. As illustrated, Q2 - the spring selling season - is almost always the biggest quarter of the year for luxury home sales.

After climbing significantly through November, interest rates have been dropping since then, through the first week of January - which is good news for both buyers and sellers. However, rates are still much higher than the lows seen in the last few years.

Long-Term Appreciation Trends by City

As seen in the first chart below, Oakland was absolutely hammered by the foreclosure crisis, precipitating an enormous drop in values after peaking in 2006 during the subprime bubble. Its recovery since 2011 has been even more dramatic than its crash. The other area communities were not as affected by distressed property sales, so their percentage appreciation rates since 2011 are much lower than in Oakland, but they have all still seen enormous jumps in values.

Simone Koga

DRE #: 01897985

415.706.1586

Simone@SimoneKoga.com

Compass is a licensed real estate broker (01991628) in the State of California and abides by Equal Housing Opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdraw without notice. No statement is made as to accuracy of any description. All measurements and square footages are approximate. Exact dimensions can be obtained by retaining the services of an architect or engineer. This is not intended to solicit property already listed