Oakland home values a block-by-block prospect
on February 8, 2009
By Elise Craig and Melanie Mason/Oakland North
On the corner of 34th Street and Market Street in Oakland, a Coldwell Banker sign is attached to a chain link fence in front of a house with graffiti-covered boarded windows. Beside it, a black arrow on a yellow plastic sign points to a real estate auction up the street. A few doors down, Alain Pinel Realtors is selling the house with the red steps, where plastic toys in primary colors lie in the too-tall grass.
Farther down, a red Keller Williams sign stands in front of the white clapboard house. Directly across the street, a Century 21 sign sits in the upstairs window of a yellow duplex with green and red trim. If you want, you can buy the Victorian with a bay window at an online auction. A sign in the front window says the starting bid is $50,000.
There’s no for sale sign in front of the gray house next door, but the neighbors are moving out. Two men are hauling a twin-sized mattress into a rented U-Haul. According to neighborhood lore, a squatter moved into the empty yellow house, across the street, hoping to claim it for his own in court, but the East Coast bank that owns the house kicked him out.
The real estate market isn’t uniform in Oakland, so foreclosures tend to look like this – isolated blocks of empty houses, boarded-up windows, and for-sale signs. What’s happening on one block cannot be extrapolated to explain what’s happening on the next block, or next ZIP code, over.
“A good area is not defined by its ZIP code,” said David Kerr, president of the Oakland Realtor’s Association. “It’s defined by block, it’s defined by neighborhood.”
That variability can be found in the 94608 ZIP code, an area that includes both the Golden Gate neighborhood of North Oakland and the adjacent city of Emeryville.
Maxine Burton, who has watched property values rise and fall on her 34th Street block for the last 35 years, says that the people who could afford to live in the neighborhood have changed. Now, only real estate investors are picking up the houses that used to be owned by families.
“This neighborhood has gone up and come down,” she said. “Right now it is at a standstill.”
On Burton’s block, the for-sale signs abound, but there are markedly fewer signs on the next block over at 34th and San Pablo. That’s where Cesceli Harvey-Davis lives with her toddler son.
Standing outside her home, she emphatically said that her block is improving.
“Oh, God yes, “she said. “This block is pretty cool now.”
There are 16 properties in active foreclosure in the 94608 ZIP code now, Kerr said. Five foreclosed single-family homes or condominiums sold last month.
Of the 140 homes sold last year in that ZIP code, 54 of them-approximately 39 percent-were foreclosures.
It is impossible to generalize about the value of the neighborhood. One block of well-kept lawns leads to another with rusted cars on the front lawn. Compared to Golden Gate, nearby Rockridge and Temescal have relatively few foreclosures. Of the 23 active real-estate listings in Rockridge, none are bank-owned properties–two are potential short sales, in which the bank allows a homeowner to sell the home for less than their mortgage balance.
North Oakland as a whole has had significantly fewer foreclosures than other parts of the city. East Oakland, especially, has been hurt by a recent wave of foreclosures.
In the 94621 zip code of East Oakland, for example, 157 of 200 home sales-79 percent – were foreclosures.
“East Oakland has been really hard hit,” Kerr said. “You’re talking over half of the sales are bank-owned. That’s not the case in North Oakland.”
At least, not yet.
Some analysts are predicting continuing foreclosures in 2009. Thomas Davidoff, an assistant professor of real estate and urban policy at UC Berkeley’s Haas School of Business, said that house prices will continue to fall, making it harder for people to stay in their homes.
“The number one reason people default on their mortgages is that they owe more than the house is worth,” Davidoff said. “More and more people are finding themselves in that position. I’d be very surprised if home prices turn around in six months.”
Davidoff said he believes that while falling home prices and foreclosures may disproportionately affect certain neighborhoods in the short-term, they will eventually have consequences in the lesser-affected neighborhoods as well.
“You just can’t have one neighborhood fall 50 percent and not affect the prices in the other,” he said.
But Kerr, the president of the Realtor’s Association, said fears of a second wave of foreclosures were based on climbing interest rates that made mortgages less affordable.
“Now interest rates are falling,” he said. “It’s not going to as bad as people thought.”
In any case, there is no one prediction on what will happen in Maxine Burton’s neighborhood, and neighborhoods across Oakland.
“If anyone tells you they truly know what’s going to happen, they’re lying to you,” Kerr said. “None of us really know what’s going to happen.”
That includes Burton, who is currently seeking a loan modification on her home that she shares with her disabled husband. But she intends on staying in her long-time neighborhood.
“I know that real estate fluctuates,” she said. “We’ll make it one way or the other.”
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