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Thydour Coleman shook her head as she spoke about the four mothers evicted from a West Oakland house bought by a real estate investment company planning to flip it.

The McClymonds High School graduate was born and raised in the community, leaving for four decades before returning two years ago. It was unrecognizable, she said.

“The neighborhood has changed completely since I was a little kid,” Coleman said as she walked her dog a block away from the Moms 4 Housing eviction. “I’ve never seen so many homeless people in my life, and they keep building these expensive … houses. They only care about the rich and the famous.”

On Tuesday morning, Alameda County sheriff’s deputies evicted four mothers from a two-story home on Magnolia Street after they had occupied the house, without the owner’s permission, for nearly two months. The episode turned the spotlight on the Bay Area’s exorbitant housing prices — but also on the practice of home flipping and what role it plays in people being priced out of neighborhoods.

For the past nine years, Wedgewood Properties, the Southern California firm that owns the Magnolia Street house, has been one of Oakland’s most prolific house flippers, rehabbing and selling 160 homes. The company says it has spent an average of $57,000 per home, about $9.1 million in total, using all local labor to do the work. Most of the homes were owned by banks, having gone into foreclosure during and after the financial crisis of 2008. They include homes like 2753 67th Ave., which the company bought at auction for $367,000 and sold six months later for $573,000.

Wedgewood spokeswoman Leslie Moody said the company has paid more than $2 million to Oakland in transfer and property taxes. “We bring employment to the local community, rehabilitate severely damaged homes and revitalize communities,” she said. “That rundown, vacant house is now a like-new home available to first-time home buyers.”

Critics call it real estate speculation that fuels gentrification and displaces longtime working-class Oakland residents, many of them victims of predatory lending. More affluent newcomers take their place.

Housing data show that in the San Francisco-Oakland-Hayward metropolitan region, house flips are not as common as in many cities. In the third quarter of 2019, 380 homes were flipped, about 3.7% of all sales, according to Attom Data Solutions, a company that compiles real estate data. That rate ranked 129th out of 148 metro areas in the country.

The median purchase price of rehabilitated houses in the Oakland region was $604,000 and those properties’ median sales price was $735,000, a 21.7% return on investment, according to Attom. The company estimates that a flipper must spend 20% to 33% of the property’s after-repair value to rehab a house. The margin also ranks near the bottom of metro areas at 133rd.

Maksim Stavinsky, co-founder and chief operating officer of Roc Capitol, said in an Attom report that declining profits have led to an increased interest in renting out investment properties rather than renovating and selling them.

“We have been seeing a decline in projected and realized profits for borrowers on projects, despite the fact that borrower financing costs have been meaningfully coming down,” said Stavinsky. “This has led to much greater interest and activity in our rental programs. We expect these trends to continue.”

Flipping homes is not as easy as popular HGTV home improvement shows make it out to be, according to those who do it. Sean Pan, who has bought and fixed up five homes in Santa Clara County, said that he has not quite broken even financially on his investment. While he made $300,000 on one deal, he lost $400,000 on another. Like most house flippers he borrows money from private lenders, which means 10% interest rates. That gets expensive very quickly.

“With the last house, unfortunately, the market cooled down,” he said. “I took a fat loss. There are a lot of mistakes you can make. It was a hard lesson that you can lose money flipping houses just as quickly as you can make money.”

Single-family homes that are flipped tend to be older — the median year built is 1961 — and at an average of 1,300 square feet they are smaller than the homes being constructed, according to Attom. It takes an average of 181 days from purchase to sale of an investment property.

Almost 15% of the flipped homes last third quarter were bought with cash, while only 6.1% are sold to Federal Housing Administration buyers, often first-time home buyers.

The Moms 4 Homes group squatted inside 2928 Magnolia St., a two-story, three-bedroom, one-bath house built in 1908. Wedgewood bought the house for $500,000 at a foreclosure sale in July and took possession in November, two days after the mothers took residence.

The house sold in 1997 for $50,000, and in 1987 for only $15,000.

Todd David, executive director of the San Francisco Housing Action Coalition, said the occupation of the house was “totally predictable.”

“These moms got to the point where they said, pardon my French, ‘This is totally f—ing ridiculous. We can’t afford a place to live anywhere anymore,’ ” David said. “I don’t think anyone else should be surprised this happened because the frustration has reached a new level.

“This is the very predictable outcome because we’ve under-produced housing,” he said.

In California, there were 5,029 flips in the third quarter, about 5% of all sales, a 3% annual drop, according to Attom. The company used deed data to classify as a flip the sale of a single-family home or condo when the property had previously been sold within the last 12 months.

“That’s how gentrification occurs, because there’s not new units of housing on the market, so they take existing, older affordable housing and upgrade those units,” David said. “We created that flipping incentive by limiting the housing supply.”

Oakland City Council President Rebecca Kaplan has proposed that the city acquire homes destined for foreclosure auctions and use them for affordable housing. Alameda County’s homeless count last year showed a 47% increase in Oakland.

“Numerous people have been subjected to predatory foreclosures and wrongful evictions, leading to displacement and thousands of people living on our streets,” Kaplan said in a statement Thursday. “In order to provide affordable housing and protect and preserve housing for our community, it is important to use all tools available.”

In the San Francisco-Oakland-Hayward region, Attom found that of the 1.2 million residential properties, 4,539 were vacant in the fourth quarter of last year, or 0.38% of the housing stock. Almost 300,000 of those residential units were investment properties, and 3,027 of those, just over 1%, sat vacant, according to Attom. That percentage is ranked 151st out of 158 metro regions.

In the 94608 ZIP code, where the Magnolia Street property sits, there are 9,256 residential units and 18 were vacant in the fourth quarter last year. Almost 44%, or 4,065, of the neighborhood’s housing units were investment properties, and of those, 11 were vacant in the fourth quarter.

As for Coleman, the West Oakland native, she plans to move to Hayward or San Leandro, where it’s more affordable.

“I’ve had enough,” she said.

San Francisco Chronicle staff writer Rachel Swan contributed to this report.

Matthias Gafni and J.K. Dineen are San Francisco Chronicle staff writers. Email: matthias.gafni@sfchronicle.com, jdineen@sfchronicle.com Twitter: @mgafni, @sfjkdineen

The median price paid for an existing, single-family home in the Bay Area fell in 2019 for the first full year since 2011, according to data from the California Association of Realtors.

The median price, the point at which half of homes sold for more and half for less, fell to $928,000, down 2.3% from $950,000 in 2018.

Forces pushing prices up — the region’s booming economy, chronic housing shortage and a hotly anticipated flood of initial public offerings — were offset by negative factors, including strained affordability, outmigration to cheaper locales and shrinking federal tax breaks for homeownership.

The association’s numbers do not include condominiums, new construction and homes that were not entered into a multiple listing service.

Of the nine Bay Area counties, Santa Clara had the biggest price drop, 5.6%. However, it had been the strongest the year before, rising 13.5%, said Patrick Carlisle, chief market analyst with Compass, a real estate brokerage.

Oakland-Berkeley was the strongest submarket last year, attracting buyers seeking an “urban ambience” at a lower cost than San Francisco, he said.

Abio Properties agent Shannon Prokup was stunned when a home she listed on Ashby Avenue in Berkeley attracted more than 400 people at open houses last Saturday and Sunday. The home has two bedrooms, one bathroom and 1,100 square feet; it is priced at $825,000. “I was not expecting that kind of turnout,” she said. But “there is not a ton on the market under a million dollars. And interest rates are still low.”

Prices in all of Alameda County, however, fell 2.1% last year. Prices were also down in Marin, San Mateo and Sonoma counties but up slightly in Contra Costa, Napa and Solano counties. San Francisco’s median price, $1.6 million, was dead even with 2018.

The median price in San Francisco hit a high in the second quarter of 2019, “probably driven by IPO hype,” Carlisle said.

A string of large San Francisco companies went public, starting with Levi Strauss and Lyft in March, Pinterest in April, Uber in May and Slack in June. Most employees of these companies, except for Slack, which sold shares in a direct listing, were prohibited from selling their shares for up to six months.

In March and April, “A bunch of people said, ‘I’m not going to sell now, I’ll wait until the millionaires come out.’ Then there were buyers who said, ‘We need to buy now before we are competing with all these millionaires,’” Carlisle said. “The second quarter got exacerbated by the sellers waiting for the millionaires and buyers trying to beat millionaires to the market.”

And it wasn’t just in San Francisco. “The rush happened before everything went IPO,” said Linnette Edwards, co-founder of Abio Properties in the East Bay. “I had buyers who were adamant about buying before the IPOs,” including one couple that was expecting a baby. “They called it baby IPO,” she said.

Jason Buttorf, a Compass agent in San Francisco, had a client who works for Slack. He and his wife had been renting in Golden Gate Heights and eyeing homes there for years. In July, shortly after Slack went public, their “dream home” came on the market and they snapped it up for over $2.5 million.

By the time fall rolled around, however, the market “was mysteriously quiet and uneventful,” Buttorf said.

Carlisle agreed. “The hype might have affected (the market) more than the reality,” he said.

Prices typically peak in the spring and summer and decline in the fall and winter. On a year-over-year basis, Bay Area home prices did better in the second half than the first, largely because interest rates declined, said Jordan Levine, the Realtor association’s deputy chief economist.

But there’s no doubt that the market has cooled. The median price paid for a single-family existing home in the Bay Area fell from $727,000 in 2006 to $430,000 in 2009. It rose to $500,000 in 2010 (thanks in part to a first-time home buyer credit), then dropped again in 2011, to $460,000. After that it embarked on a string of stratospheric increases that brought it to $950,000 in 2018.

“As the economy picked up, home prices in the Bay Area, where the economy was outperforming the state and nation, bounced back very quickly,” Levine said. “As prices have risen, affordability has become more of a problem, which limits some price appreciation.”

Federal tax changes that took effect in 2018 have also “increased the cost of homeownership compared to what it was in the past,” he added. Congress reduced the mortgage interest deduction on loans originated after 2017 to interest on $750,000 in debt, down from $1 million. It also capped the previously unlimited deduction for all state and local taxes combined, including income and property taxes, at $10,000.

“You are seeing that play a role, particularly in the Bay Area, where most homeowners are going to be impacted by those caps,” Levine said. But, he added, you can’t blame it all on tax changes. “We have seen the pace of growth slowing for several years.”

For the month of December only, the median price paid for a single-family, existing home in the Bay Area was $908,750, down 1.8% from November but up 6.9% from December 2018, according to numbers released Friday by the Realtors association.

“December and January are almost always the lowest prices of the year,” Carlisle said. “The whole market is seasonal but the luxury market is fiercely seasonal.” High-end sellers leave for the holidays and take their homes off the market, assuming high-end buyers have also left. As a result, the market gets dominated by lower-end sales, which pulls down the median price.

The median price paid for a single-family home in San Francisco fell to $1.45 million in December, down 10.4% from November and down 3.3% from December 2018. That was the worst showing of any Bay Area county.

On a year-over-year basis, the December median price was up 3.7% in Alameda County, 8.6% in Contra Costa, 2.3% in Marin, 5.5% in Napa, 6.5% in Santa Clara, 7.2% in Solano and 1.3% in Sonoma. It fell 0.5% in San Mateo.

For the state as a whole, Levine predicts that low interest rates will continue to bolster buyer demand but shrinking inventories will keep sales from rising more than 1% or 2% this year. “We see price growth in the mid-single-digit range.”

Whether the Bay Area does better or worse than the state “is a tough call,” he said. The Bay Area “has upward momentum from the demand side,” as job growth keeps unemployment near record lows. But the inventory shortage is even more acute in the Bay Area, “which is spilling over to the demand side,” with people leaving the area in search of cheaper housing.

Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender