“It was like something out of a movie, you know. We were dressed in the all-white suits with the full face masks,” he said.
Ramos, 29, has spent the last 10 years on 25th Avenue in a duplex owned by his family. Over that decade, the real-estate firm Zillow estimates that Oakland’s median home value ballooned from under $380,000 in 2011 to over $890,000 — a trend that the coronavirus pandemic accelerated. Now his neighborhood is the hottest real estate market in the nine-county Bay Area region, the epicenter of a pandemic-era housing price boom in the East Bay.
Since the start of the pandemic, Reservoir Hill’s median home value has shot up by nearly 25%, from over $643,000 to about $800,000, per Zillow’s estimates. The neighborhood, which sits just south of the MacArthur Freeway and west of Fruitvale Avenue, is one of 14 in Oakland where estimated home prices increased by 15% or more in a single year. Most of these neighborhoods are in the eastern flatlands, from Reservoir Hill to Durant Manor.
“The data definitely shows a lot of these Oakland neighborhoods (are) among the fastest appreciating,” Jeff Tucker, a senior economist at Zillow, told The Chronicle.
But the trend extends far beyond Oakland. The housing market exploded nationwide in 2020: Home prices rose by 12%, the largest annual gain in 15 years, according to the SP Case Schiller Price Index. Tucker said the pandemic accelerated the home-buying process for many Americans by highlighting the importance of personal space, while de-emphasizing proximity to workplaces and city centers.
According to Tucker, Zillow generates a median home value estimate for a given neighborhood based on several factors, including the neighborhood’s location and its recent sales. Reservoir Hill had only five sales from March 2020 to March 2021, but those homes sold for much higher than Zillow would have expected — which is partly why its home values soared so much in the past year.
As for location, Tucker said many East Oakland neighborhoods appear to be in a “sweet spot” for young, upwardly mobile families.
“These neighborhoods in Oakland provide single-family homes at an affordable price point with some of the urban lifestyle amenities that people still like,” he said.
The surge in home values may benefit East Oakland homeowners looking to sell, but it’s also creating what Policy Link is calling a “displacement crisis” for struggling owners and renters. Even in early 2015, when Oakland’s median home value was a mere $520,000, most of the city’s residents could not afford to purchase a median-priced home in their own neighborhoods, according to Policy Link, a national research institute based in Oakland.
And even when they can afford it, families of color in East Oakland might not be able to get their offers accepted in a red-hot housing market like this one, according to Tucker.
“There’s a major downside here,” he said. “When there’s this super-elevated competition for homes, and people shopping from all over the Bay Area, it’s just harder to keep up if you’re not coming to the table with high income and sterling credit, where you can get preapproved for a mortgage and move quickly on closing. Or … where people are making cash offers. All this effectively locks out people who, in many cases, could afford homes.”
Soaring home prices have contributed to an exodus of people of color: Black people made up 44% of Oakland’s population in 1990, and now they make up less than 25%. In the census tract encompassing Reservoir Hill, the percentage of Black residents declined from 38% to 21% of the population from 2000 to 2019, while non-Hispanic white residents increased from 22% to 31%. (Hispanic populations rose and Asian populations declined, though both at more modest rates.)
Many Black and Latino ex-Bay Area residents have migrated to more affordable cities inland like Sacramento, according to a 2018 analysis by the UC Berkeley Terner Center. Ramos said many of his friends have moved to Stockton.
Chris Schildt, a senior policy expert at Policy Link, pointed out that the 2008 mortgage crisis hit East Oakland homeowners especially hard. Predatory lenders steered many Black and Latino homeowners into bad loans, forcing them into foreclosure when the recession hit.
“During the foreclosure crisis, so many private companies bought up homes in East Oakland, so they’re the ones profiting from this increase in home values right now,” she said.
These home value increases will likely make it harder for East Oaklanders renting from property management companies to stick around.
“Generally speaking, if the neighborhood home value rises, that’s a signal it’s becoming more desirable to people with higher incomes,” Schildt said. “A signal that rents will rise as well.”
Reservoir Hill feels a world away from these concerns — at least at first glance, and depending on whom you ask. The neighborhood is racially integrated, and is home to working people in education, engineering and the arts. Many residents have owned their homes for decades.
Lauren Beilin is one of the exceptions: She moved into her home on Sheffield Avenue soon before the pandemic hit. She was attracted to the two-bedroom house for two main reasons: It was what she could afford in Oakland, and it lay within the school map boundaries for Glenview Elementary, a public school she thought would be a good fit for her two young children. (25th Avenue lies just outside those boundaries.)
When told she lived in the hottest housing market in the Bay Area, Beilin was surprised.
“I mean, I know we’re in the Bay Area, but we’re below 580,” she said. Even though her home has likely appreciated since she bought it, Beilin said she wouldn’t consider selling anytime soon. “It’s the best neighborhood I’ve ever lived in,” she said.
Aside from Beilin and a few other young families, Sheffield Avenue has had a low turnover rate in the past few years — partly because the community is so tight-knit. But a few homes near Ramos’ street did have impressive sales in 2020, according to Zillow, which could have driven up home values for the rest of the neighborhood.
Ramos said those higher prices have brought wealthier, whiter neighbors to his street, and to other parts of the city. “Lots of people are coming from San Francisco,” he said. “Especially where I’m at, people have moved away. Mostly people of color.” He has mixed feelings about gentrification in Oakland overall: “Maybe the crime’s gone down,” he said. “But then it’s also sad, you know, seeing people that lived here for lots of years being pushed out of their homes. … When it was 2010, you could (rent) a place in Lake Merritt for $800 and now it’s like, $2,000 and up.”
Ramos still appreciates his street’s community feel. “I love my neighbors, and we look out for each other, exchange phone numbers,” he said. He’s close with his aunt and her daughters, who occupy the other half of his duplex. Ramos spent a recent evening walking down 25th Avenue knocking on doors, asking neighbors to sign a petition to add speed bumps to the street.
Still, that sense of closeness with the broader community has faded a bit. “When I first moved in over here, we used to have block parties, and we were involved with the neighborhood crime watch,” he said. But over time, he added, “people who were the leaders moved out here. They got older, passed away.”
Susie Neilson is a San Francisco Chronicle staff writer. Email: email@example.com Twitter: @susieneilson
Article source: https://www.sfchronicle.com/realestate/article/What-s-it-like-to-live-in-the-hottest-real-16155429.php