Home Prices In Berkeley (Or Should That Be Manhattan?) V. Oakland
It’s always good to find fellow real-estate groupies out there in the blogosphere.
Recently I made the virtual acquaintance of My East Bay Agent, a site run by Andy Kaufman, Glen Bell and Norman Gee, three real-estate agents in the East Bay (well, there’s a surprise).
I was led to the site via Felix Salmon’s Portfolio blog, via Mike Simonsen’s Altos blog, both of whom paused to consider a fascinating Altos graph which shows what’s been happening over the past year to house prices in Berkeley and Oakland (below).
Simonsen believes the chart is indicative of the real-estate pricing phenomenon being experienced across the nation, namely:
- Demand is off everywhere and everyone knows it.
- So if you’re a home buyer in the East Bay with good cash and good credit, you get your pick. In this case, Berkeley has generally better schools, more cachet, etc., so the buyers go there first.
- There’s enough demand to keep the market afloat.
- If you don’t have good cash and good credit, you get nothing. There is literally no spillover demand for Oakland.
- A few years ago, a home buyer might look to the nicer neighborhoods in Oakland for additional inventory or a lesser school-premium price. Not the case any more.
Salmon, interestingly, sees one overarching reason for the disparity on display: “Berkeley is like Manhattan,” he writes. “It is one of the very few areas of the country where marginal house prices are set by what people are willing to pay, rather than what they are able to pay.” Read his argument here.
Commentators on the sites raise pertinent issues such as the difference in inventory, crime stats and the always significant existence of micro-neighborhoods. Sometimes it seems making any generalization about real estate — or life for that matter — is fraught with problems.
