Bay Area real estate has long been among the most expensive residential or commercial land in the country, but there was a brief period in 2020 when rental prices sunk, largely pandemic-related but the prices were low all the same.
It is safe to say that the price crater from the pandemic has subsided and, in many cases, much of that real estate is more expensive than prior to the pandemic.
What explains this jump in price? Does a drop in rental prices reflect an opposing jump in home prices? Or is the Bay Area simply too coveted and this marks the start of another residential boom?
The San Francisco Chronicle used available home data from Zillow to map out what neighborhoods around the Bay Area experienced the largest price jump during the pandemic. The data set the Chronicle analyzes is from December 2019 to December 2021.
That publication's analysis reflects a growing trend among younger professionals. The shift to work from home made the fast-paced city life less appealing to younger people. The Chronicle found that the neighborhoods with the most growth over the pandemic often had more outdoor space, better views and close proximity to outdoor amenities.
While the migration away from city centers was certainly in motion prior to the pandemic, the health-related shutdown orders and the ensuing pandemic chaos pushed the flow of millennials away from cities into high gear.
“Instead of deciding to rent and keep saving or buy a small condo in the city, they could consider homes in Marin, Alameda or Napa counties instead. That’s especially true of the large swatch of millennials in their mid-30s - the age when people typically buy their first home and start a family,” said Matt Kreamer, a data spokesperson for Zillow.
Kreamer elaborated that the broad shift to working remotely has given first-time homebuyers a different set of desires than ever before. Prior to the pandemic, 30-year-old home buyers would factor in commute times and proximity to the office when looking to purchase but now, buyers want more outdoor space for their money, private yards and access to amenities and transit.
Notably, the housing market, especially in the Bay Area, is a seller's market. That is, the selection of houses available is "historically" limited.
Two neighborhoods in the East Bay that saw the biggest explosion in price over the pandemic are Richmond's May Valley in Contra Costa County and Oakland's Redwood Heights in Alameda County. Both neighborhoods saw a more than 40% increase in home value over the past two years.
According to Eric Kang with eXp Realty, Redwood Heights has become a hotspot for younger families looking to upgrade from starter homes.
The neighborhood sits just between I-580 and SR-13, offers several outdoor parks and open spaces within a five-minute drive and has stunning views of the city and greater Alameda County.
“Traditionally when people hear Oakland hills they automatically start thinking about Montclair, Claremont and Berkeley Hills,” Kang said. “As the market gets hotter, a lot of buyers are priced out of those areas.”
May Valley in Richmond is also very close to several outdoor amenities and offers great views.
It's centrally located to several schools and sits close enough to I-80 to ease commuting.
While both neighborhoods differ geographically and demographically, the similarities are outstanding. As pandemic-related health orders subside, will the continued flock of younger professionals to the suburbs hurt the metropolitan economy? Or will the suburban sprawl continue throughout the East Bay?
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