COMPREHENSIVE HOUSING MARKET ANALYSIS Oakland-Hayward- Berkeley, California
U.S. Department of Housing and Urban Development, Office of Policy Development and Research
As of May 1, 2019 Oakland-Hayward-Berkeley, California Comprehensive Housing Market Analysis as of May 1, 2019 Executive Summary 2
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! Berkeley ¨¦§680 Contra Costa Executive Summary ¨¦§80 ! Emeryville ! Oakland ! San Ramon San ! Alameda Francisco Housing Market Area Description ! San Leandro ¨¦§580 ! Dublin SAN FRANCISCO ! ¨¦§880 Hayward The Oakland-Hayward-Berkeley Housing Market Area (hereafter, BAY Oakland HMA) is coterminous with the Oakland-Hayward-Berkeley ¨¦§280 Metropolitan Division, consisting of Alameda and Contra Costa Alameda ¤£101 Counties. The HMA is located 10 miles to the east and directly across the San Francisco Bay from the regional job center of San Santa Clara Francisco. The current HMA population is estimated at 2.83 million. San Mateo San Jose Oakland-Berkeley-Hayward HMA ! ! Places of Interest Major Roads The Oakland HMA is home to the University of California, Berkeley Urbanized Areas (hereafter, UC Berkeley). The presence of the university, a highly Waterbodies educated workforce, and spillover effects of the technology boom in Silicon Valley have contributed to recent growth in the high-tech Tools and Resources industry, along with stable employment anchored by the university Find interim updates for this metropolitan area, and select geographies nationally, and headquarters for large regional employers such as Kaiser at PD&R’s Market-at-a-Glance tool. Additional data for the HMA can be found in this report’s supplemental tables. Permanente, Safeway, and Chevron Corporation. For information on HUD-supported activity in this area, see the Community Assessment Reporting Tool.
Comprehensive Housing Market Analysis Oakland-Hayward-Berkeley, California U.S. Department of Housing and Urban Development, Office of Policy Development and Research Oakland-Hayward-Berkeley, California Comprehensive Housing Market Analysis as of May 1, 2019 Executive Summary 3
Market Qualifiers Economy Sales Market Rental Market Strong: Nonfarm payrolls have Tight: New and existing home Tight: During the first quarter of increased each year since 2011, prices during the 12 months ending 2019, the average apartment rent and expanded by an average of April 2019 were up approximately rose to $2,313, up 3 percent from 26,800 jobs, or 2.6 percent, a 9 and 6 percent, respectively, from a year ago. year from 2011 through 2017. a year earlier. Job growth has continued but moderated during The sales housing market is tight, with a 0.4-percent The overall rental market is tight, with a current rental the past 2 years. During the 12 months ending vacancy rate, down from 1.9 percent in 2010. vacancy rate estimated at 3.4 percent, down from April 2019, nonfarm payrolls in the HMA increased Demand has exceeded construction of sales units, 6.6 percent in 2010. Despite a significant increase in by 18,400 jobs, or 1.6 percent, to 1.19 million jobs, leading to rapid price increases since 2013. The rental construction activity, as measured by building after an increase of 2.1 percent during the previous average price for a new home during the 12 months permits issued, since 2011, rental market conditions 12 months. The professional and business services ending April 2019 was up 9 percent from a year have tightened due in part to large net in-flows of and education and health services sectors led earlier, to about $1.03 million, and existing home rental households from the notably more expensive growth during the most recent 12 months. During prices were up nearly 6 percent to $819,000. markets of San Francisco and San Jose. During the the next 3 years, nonfarm payrolls are expected During the next 3 years, demand is expected for next 3 years, demand is expected for 16,100 new to increase an average of 1.4 percent a year. 14,450 new sales units; the 2,150 homes currently rental units in the HMA; the 10,100 units currently under construction will meet part of the demand. under construction will meet a portion of the demand during the forecast period.
TABLE OF CONTENTS Economic Conditions 4 3-Year Housing Demand Forecast Population and Households 9 Sales Units Rental Units Total Demand 14,450 16,100 Home Sales Market Conditions 13 Oakland HMA Under Construction 2,150 10,100 Rental Market Conditions 17 Notes: Total demand represents estimated production necessary to achieve a balanced market at the end of the forecast period. Units under Terminology Definitions and Notes 22 construction as of May 1, 2019. The forecast period is May 1, 2019, to May 1, 2022. Source: Estimates by the analyst
Comprehensive Housing Market Analysis Oakland-Hayward-Berkeley, California U.S. Department of Housing and Urban Development, Office of Policy Development and Research Oakland-Hayward-Berkeley, California Comprehensive Housing Market Analysis as of May 1, 2019 Economic Conditions 4
Economic Conditions
Largest sector: Education and Health Services The workforce has high levels of educational attainment, due in part to the presence of UC Berkeley and California State University, East Bay (hereafter, A significant recent expansion of hospitals and clinics in the HMA, primarily Kaiser Permanente (the largest employer), has made the CSU East Bay), which have approximately 59,100 students, combined, and education and health services sector the largest sector in the HMA since have contributed to the growing technology industry in nearby Silicon Valley. 2015, when it surpassed the professional and business services sector. UC Berkeley alumni have founded or co-founded more than 30 tech start-up companies since 2000, including Tesla, Zynga, and TechCrunch. The HMA has become an increasingly popular location for Bay Area businesses because the Primary Local Economic Factors average asking rent for office space in the Oakland central business district The Oakland HMA has a diversified economy, which includes significant was $4.67 per square foot during the first quarter of 2019, a small fraction of employment in higher education, healthcare, and high-tech industries (Figure 1). the $82.80 per square foot average rent in the San Francisco central business district (Avison Young). Figure 1. Current Nonfarm Payroll Jobs in the Oakland HMA, by Sector