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Oakland Real Estate Market: 5 Best Places to Invest

by Heba BakerAug 15, 2019November 23, 2023

If you’re looking for a strong investment market in California’s Bay Area, the Oakland real estate market should be on your radar.

The California Housing Market

The California real estate market has been rebalancing itself, but it’s still got a way to go. Although housing inventory in the US as a whole has increased, it is still considered pretty constrained and doesn’t match up to buyer demand, keeping property prices high. The California Association of Realtors recently released its mid-year market forecast. According to the report, housing affordability in the US housing market is at 57 percent, whereas California’s affordability is much lower, at 32 percent.

The good news is that overall economic activity is healthy. We saw GDP hit 3.1 percent at the beginning of the year, a low unemployment rate of 3.7 percent which we haven’t seen in decades, and interest rates hitting record-lows at 3.75 percent.

More than 100 cities in California are mainly renter-occupied. This is important data that any real estate investor planning on buying a rental property should know. Cities with high rental demand are not rare in the state, so when it comes to the Oakland real estate market, what do we see?

Oakland Real Estate Trends

In 2018, the Oakland housing market had the highest percentage of renters in the Bay Area with 58.9 percent of the population renting. According to data from NeighborhoodScout, the current percentage of homes operating as rental properties in Oakland is 60 percent.
Oakland house prices explain why the homeownership rate in the market is so low. The average price of Oakland houses for sale is $782,704 according to Mashvisor’s data. And Redfin reports that homes typically sell about 12 percent above list price.
The median home value in Oakland is down 0.7 percent from last year and is at $734,700. It’s currently a seller’s market which makes sense when you think about the tight inventory and heightened prices.
Because it’s a seller’s market, that means buyer demand is outpacing the supply of houses for sale. We can see that this is a high-demand market as 65 percent of Oakland real estate for sale is accepting offers. (Typically, any housing market with over 50 percent of listings accepting offers indicates high buyer demand).
Seasonality plays a big role in the market’s conditions. In May, Oakland real estate investors probably had an easier time finding homes for sale as new listings peaked that month. Based on historic seasonality trends, expect the next peak in listings to come in September.

Oakland Real Estate Market: Mashvisor’s Summary

Median Property Price: $782,704
Price per Square Foot: $524
Price to Rent Ratio: 23
Average Days on Market: 51
Monthly Traditional Rental Income: $2,824
Traditional Cash on Cash Return: 1.1%
Monthly Airbnb Rental Income: $3,129
Airbnb Cash on Cash Return: 1.4%
Airbnb Occupancy Rate: 65%

The Short Term Rental Market: Airbnb Oakland

With new regulations being set on the short term rental industry every day, it’s important for real estate investors going after this strategy to keep up with changes to legislation. So for this case, is Airbnb legal in Oakland?

Seeing as currently both the Oakland Municipal Code and Oakland Planning Code do not specifically mention or address short term rentals, there isn’t a lot of heat from local regulators on the industry. So there are no Airbnb regulations in Oakland. While short term rentals are legal in the Oakland real estate market, there are some restrictions.

Planning regulations currently prohibit renting your single-family home, duplex, apartment/condo, live/work unit, or room for a period of time less than 7 consecutive nights. If you do, your short term rental business will be treated as a hotel as this activity in the Oakland real estate market is referred to as “Transient Habitation.”

Transient habitation is not allowed in some residential and commercial zones in the Oakland real estate market. So before investing in Oakland real estate, make sure your Airbnb rental property complies with zoning. For more information on how the City’s Planning Code regards different short term rental activities, click here.

5 Best Places to Invest in Real Estate in Oakland 2019

Using data from Mashvisor’s investment property calculator, we’ve located the top neighborhoods in which Oakland investment properties have the highest potential returns. Here’s where to buy a rental property in the Oakland real estate market this year:

South Prescott

Median Property Price: $565,384
Price per Square Foot: $428
Price to Rent Ratio: 16
Average Days on Market: 78
Monthly Traditional Rental Income: $2,900
Traditional Cash on Cash Return: 2.5%
Monthly Airbnb Rental Income: $2,921
Airbnb Cash on Cash Return: 6.5%
Airbnb Occupancy Rate: 70%

Hegenberger

Median Property Price: $406,500
Price per Square Foot: $374
Price to Rent Ratio: 13
Average Days on Market: 119
Monthly Traditional Rental Income: $2,696
Traditional Cash on Cash Return: 3.2%
Monthly Airbnb Rental Income: $3,569
Airbnb Cash on Cash Return: 4.4%
Airbnb Occupancy Rate: 64%

Castlemont

Median Property Price: $495,000
Price per Square Foot: $352
Price to Rent Ratio: 14
Average Days on Market: 266
Monthly Traditional Rental Income: $2,900
Traditional Cash on Cash Return: 2.8%
Monthly Airbnb Rental Income: $3,818
Airbnb Cash on Cash Return: 4.0%
Airbnb Occupancy Rate: 60%

Sobrante Park

Median Property Price: $409,800
Price per Square Foot: $429
Price to Rent Ratio: 12
Average Days on Market: 17
Monthly Traditional Rental Income: $2,900
Traditional Cash on Cash Return: 3.8%
Monthly Airbnb Rental Income: $3,060
Airbnb Cash on Cash Return: 3.5%
Airbnb Occupancy Rate: 68%

Iveywood

Median Property Price: $426,249
Price per Square Foot: $570
Price to Rent Ratio: 17
Average Days on Market: 3
Monthly Traditional Rental Income: $2,100
Traditional Cash on Cash Return: 1.8%
Monthly Airbnb Rental Income: $3,292
Airbnb Cash on Cash Return: 3.2%
Airbnb Occupancy Rate: 61%

Attractive Listings Currently For Sale in Oakland

Have you heard about our Property Finder? It’s a search tool real estate investors can use to find lucrative investments matching their criteria in any US real estate market. We’ve used that tool to locate some potential properties for any investors interested in buying Oakland real estate now. Here are some stats on the properties:

Property #1:

List Price: $468,000
Traditional Cash on Cash Return: 4.39%
Airbnb Cash on Cash Return: 5.11%

Property #2:

List Price: $370,000
Traditional Cash on Cash Return: 4.75%
Airbnb Cash on Cash Return: 4.20%

Property #3:

List Price: $554,368
Traditional Cash on Cash Return: 3.78%
Airbnb Cash on Cash Return: 4.27%

To search for more properties in the Oakland real estate market, sign up for a free Mashvisor account and use our search tools.

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