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Hoping for a drop in Oakland property prices in 2025? Don’t count on it.
Despite economic shifts, Oakland's real estate market is poised for growth, driven by increasing demand and limited housing supply.
Let’s explore why property prices in this vibrant city are expected to rise in 2025.
We rely on solid, up-to-date data and statistics from multiple credible sources, ensuring our analysis is grounded in reality.
By thoroughly examining this information, we draw our own conclusions, which we share at the end of this blog post. Enjoy the read!
How this content was produced 🔎📝
This article offers thoughtful insights and analysis based on reliable sources, but it should not be considered financial advice. We work hard to research, compile, and analyze data to give you a well-informed perspective. However, as you can guess, our analysis involves subjective choices, such as source selection and methods, and it cannot fully capture the market's complexity. Please, always do your own research, consult professionals, and make decisions based on your own judgment. Any financial risks or losses are your responsibility. Additionally, you should know that we have no affiliation with the sources mentioned, ensuring our analysis is completely impartial.
1) In Oakland, there are only about 0.41 homes for each person, which is quite limited
Signal strength: strong
The fact that there is around 0.41 home per inhabitant in Oakland suggests a limited housing supply.
When the supply of homes is low, and demand remains steady or increases, housing prices tend to rise. In Oakland, a unique factor is the proximity to San Francisco, which attracts many people seeking more affordable living options while still being close to the city.
This influx of people can increase demand for housing, further driving up prices in the area. Additionally, Oakland's cultural diversity and vibrant community make it an attractive place to live, adding to the demand.
If the number of homes per inhabitant were to increase significantly, say to 0.6 or more homes per inhabitant, it might indicate a shift towards a more balanced market, potentially stabilizing prices.
Source: USCensus
2) Redfin considers the Oakland real estate market to be "very competitive"
Signal strength: strong
When Redfin ranks the Oakland real estate market as "very competitive," it indicates a high demand for properties, which often leads to rising prices.
In Oakland, the most competitive properties are typically single-family homes in desirable neighborhoods, such as Rockridge and Temescal. These areas are popular because they offer proximity to amenities, good schools, and public transportation, making them attractive to families and professionals alike.
As more people seek to buy in these areas, the demand increases, which can drive up prices. This is especially true when the supply of available homes is limited, creating a seller's market where buyers are willing to pay more.
If the market were to become "less competitive," with more homes available than buyers, it could signal a potential decrease in prices.
Source: Redfin
We created this infographic to show how property prices in Oakland compare to other big cities in California. It shows the median price as well as the price per sqft, making it easy to see which places might offer the best value. We hope you find it helpful.
3) In Oakland, about 67% of homes sell for more than their listing price
Signal strength: strong
In Oakland, around 67% of sales close at a price higher than the listing price, which is a strong indicator of demand. When buyers are willing to pay more than the asking price, it often means that competition among buyers is intense.
This competition can drive prices up because buyers are eager to secure a property before someone else does. As more people are willing to pay above the listing price, it suggests that the market is favoring sellers, who can set higher prices.
In such a market, it's common to see an upward trend in housing prices as demand continues to outpace supply. However, if the percentage of sales closing above the listing price were to drop significantly, say below 30% or 40%, it might indicate a cooling market.
Source: Zillow
4) Three major websites predict that home prices in Oakland will rise in 2025
Signal strength: strong
There are three major websites forecasting a positive growth for home prices in Oakland in 2025, which is a promising signal for potential investors.
Among these forecasts, Realtor is the most optimistic with a projected increase of 7.30%, followed by Redfin's forecast of 4%, and finally, Zillow predicts a 2.60% rise in home prices. This range of predictions shows a significant gap in expectations, highlighting the varying levels of confidence among these platforms.
While these forecasts are encouraging, it's important to remember that predictions should be taken with caution as they are based on current trends and assumptions. We will also rely on strong, reliable, and actual data to make a more informed and professional judgment about the market.
If these forecasts were to predict a negative growth or a decline in home prices, it would suggest a different outlook for the Oakland housing market.
Sources: ZillowForecasts, RedfinForecasts, RealtorForecasts
Our team designed this infographic to show how competitive the real estate market in Oakland is vs. other major cities in California. It shows the percentage of sales above the list price, a key indicator of market competition.
5) Oakland's "vacancy rate" of 7.5% shows it's a bustling and competitive market with most spaces filled
Signal strength: moderate
The vacancy rate in Oakland is currently 7.5%, which is considered very low. This low vacancy rate indicates that the housing market is highly occupied and competitive, suggesting that demand for housing is strong.
When demand is high and supply is limited, prices tend to rise as more people compete for fewer available homes. In such a market, properties that are easily rented are often well-maintained and located in desirable areas.
Specifically, modern apartments in downtown Oakland are in high demand due to their proximity to amenities and public transportation. Investors should note that if the vacancy rate were to rise above 10%, it might indicate a shift towards a less competitive market.
Sources: NeighborhoodScout, DataUSA, USCensus
6) Oakland's "Livability" score of 71 indicates a good quality of life
Signal strength: moderate
The livability score of 71 in Oakland is considered good because it reflects a balance of amenities, cost of living, and quality of life that appeals to residents.
One reason for this score is the vibrant arts and culture scene in Oakland, which includes numerous galleries, theaters, and music venues that attract both locals and tourists. Additionally, the city is known for its diverse culinary offerings, with a wide range of restaurants and food markets that cater to various tastes and preferences. These factors contribute to a high quality of life, making Oakland an attractive place to live.
Another key aspect is the proximity to natural attractions such as the Redwood Regional Park and Lake Merritt, which provide residents with ample opportunities for outdoor activities and relaxation. These characteristics enhance the city's appeal, potentially driving up demand for housing as more people seek to move to the area. As demand increases, it is likely that housing prices will rise in 2025, making it a promising market for real estate investment.
However, if the livability score were to drop below 60, it might indicate declining conditions that could deter potential buyers and investors.
Source: AreaVibes
This infographic we have made will show you how market values have changed during the last decade in Oakland vs other major places in California. Here, the percentage increase or decrease in market value will help you see long-term trends.
7) Oakland's employment rate stands at a strong 65.1%
Signal strength: minimal
The employment rate in Oakland is at 65.1%, which is considered high compared to the national average in the United States.
This high employment rate suggests that more people have stable incomes, which can lead to increased demand for housing. When people have jobs, they are more likely to buy homes, and this demand can drive up housing prices.
In Oakland, the major employment sectors include technology, healthcare, and education, which are known for providing stable and well-paying jobs. Companies like Kaiser Permanente and Clorox employ a significant number of people in the area, contributing to the strong employment rate.
If the employment rate were to drop below 60%, it might indicate a weakening job market, which could lead to a decrease in housing demand and potentially lower housing prices.
8) In the past decade, home prices in Oakland have consistently risen by an average of 7.2% each year
Signal strength: minimal
The fact that home prices in Oakland have appreciated at an average rate of 7.2% over the last decade is a strong indicator of a healthy real estate market. This consistent growth suggests that there has been a steady demand for housing in the area, which often leads to price increases.
While a positive 10-year average home value appreciation indicates a history of demand and price growth, it's important to remember that past performance doesn't guarantee future results. However, this historical trend can suggest favorable conditions for future price increases, making it a valuable piece of information for potential investors.
Investors should consider this data as part of a broader analysis, as it provides insight into the market's past behavior and potential future trends. It's a good indicator to look at, but one should also be aware of other factors that could influence the market.
If the average appreciation rate were to drop significantly, say below 2% over a similar period, it might signal a weakening market and suggest a different investment strategy.
Source: NeighborhoodScout
This infographic designed by our team breaks down the latest livability score in Oakland but also in other big cities in California. It provides a clear view of which locations offer the best overall living conditions, which is a good thing to know if you want to buy real estate.
So, are prices going to climb in Oakland in 2025? Absolutely
Oakland's housing market is poised for a price increase in 2025, driven by several compelling factors.
Firstly, the limited housing supply, with only 0.41 homes per person, combined with a very competitive market as noted by Redfin, sets the stage for rising prices. The demand is further fueled by Oakland's proximity to San Francisco and its cultural diversity, making it an attractive place to live.
Additionally, about 67% of homes sell above their listing price, indicating strong buyer competition. Forecasts from major websites predict a price increase, with Realtor projecting a 7.30% rise. A low vacancy rate of 7.5% and a good livability score of 71 also contribute to the demand.
With a strong employment rate of 65.1% and a historical average price increase of 7.2% per year over the past decade, the market conditions are ripe for continued growth. All these factors combined suggest that Oakland's housing prices are set to climb in 2025.
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