Okay, so something I’m tired of hearing is people talk about the “thousands” of empty condos all over downtown. As we all know, the condo market has suffered along with the rest of the real estate industry, and sales at new downtown buildings have not been particularly speedy. But as regular readers know, I love numbers and hate hyperbole, and the fact is that there are simply not thousands of empty condos wasting away downtown, or anywhere. In fact, according to Friday’s San Francisco Business Times (citing a report from the Mark Company), there are between 1,500 and 1,600 condos for sale in Oakland right now, and another 300 under construction.
As for the units that aren’t selling, Signature Properties is putting 30 units at 288 Third Street and 100 at Broadway Grand out for rent, and Meritage is doing the same with the 11 unsold units left at the Jade at 15th and Jefferson:
Ghielmetti said he would rather hold on to his properties and put them back on the market when home prices increase.
“We think the market will get better and we think the area will get better,” he said. “We are basically going to turn into long-term investors…We’re better off waiting than giving up now and auctioning those things off.”
The rental rates are out of my price range, ($1,900/month for a 1-bedroom at Broadway Grand), but I do hope they fill up.
Dan Lindheim, naturally, continues his relentless mission to be crowned Oakland’s worst-ever cheerleader, a title for which he is already by far the leading candidate. He really doesn’t need to try so hard.
The projects may struggle to attract tenants as much as they did to attract buyers, said Dan Lindheim, director of Oakland’s Community and Economic Development Agency. Oakland has a significant rental market – about 60 percent of housing units are rentals – but affordability often becomes a barrier to renting or buying.
“The council has a policy that they want to encourage home ownership to the extent possible,” Lindheim said. “But given the prices and given the income structure in Oakland, it’s not going to be happening anytime soon. People can’t afford the prices that developers want to sell units for.”
Okay. The issue of housing affordability for the low-income residents of Oakland is a separate one (which I hope to write at length about during recess), and should not be confused with the struggles selling market-rate condos. This myth that people just can’t afford to buy condos in Oakland is something Sean Sullivan talked about a lot during his campaign. Over at Brooklyn Avenue, David pointed out this weekend that not only does Oakland have by far the lowest median home sale price of our neighboring cities, but we’re also the only city where housing prices are continuing to fall.
Why aren’t more people taking advantage of the incredible bargains on the market in Oakland right now? There’s a reason that people are buying condos in Emeryville at higher prices, but won’t buy cheaper ones in Oakland, and I doubt it has anything to do with easy access to dinner at P.F. Chang’s. I would posit that the major barrier is crime. A friend of mine who has lived in Oakland for the last 15 years just bought a condo in Contra Costa County. I nearly cried when he called me after signing the papers. But I couldn’t really fault his decision. He and his wife had been talking about buying for like two years, and originally started looking out in the suburbs after deciding that they just couldn’t afford to buy in Oakland (the taxes there are a lot lower out there as well as the sale prices). But over the last few months, I’ve been pushing them to try looking at Oakland again, what with all the bargains out there. They thought about it and looked at a few places and seemed, to me anyway, genuinely thrilled about not having to leave Oakland. Then, for the third time in five years, their apartment got broken into.
They don’t live in a crappy neighborhood. One break-in happened in Jack London Square, the other two in Adams Point. Their buildings always seemed nice enough to me, certainly a lot nicer than mine. They’d resigned themselves to the fact that enjoying all the wonderful things Oakland has to offer also means just accepting that sometimes she was going to be mugged, and that they’d get their car windows smashed and stereo stolen every so often, and once in a while, someone might break into their apartment and steal the DVD player. They adapted to the situation, giving up on having a radio in the car (unfortunately, this didn’t entirely stop the window smashing) and keeping their possessions of real value (like her two items of nice jewelry) in a safe deposit box at the bank. They have renter’s insurance, so they’re not on the hook for the costs of replacing their computer or TV. But after it happened again in April, they decided that they’d just had enough, and switched their condo search hunt back out of Oakland and ended up buying a very cute little 2-bedroom place in CoCo. When I asked him why, he responded that he’s just tired of having to replace all his suits every few years, and that they want a kid, and want to be able to send it to a decent school. It’s pretty hard to argue with that.