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Seven years ago, for sale signs dotted suburban lawns and city streets, hot bidding wars were uncommon, and the typical single-family, Bay Area home sold for $425,000.
Those days are long gone.
Since the start of a record-breaking streak in April 2012, the median sale price for a single-family home in the Bay Area has more than doubled to $900,000, filling the nest eggs of homeowners and crushing the dreams of house hunters.
But if you look hard enough, you can still find a $425,000 home in the nine-county Bay Area.
Just not in San Francisco or San Mateo counties. No single-family homes are selling in that discount aisle, according to an analysis of Zillow listings. In Santa Clara County, a single, 600-square foot rural cottage in Morgan Hill needing “thorough” repairs goes for $325,000. Alameda County had just 27 budget listings, while Contra Costa County offered 92 low-cost homes.
When the 83-month-long run of increasing, year-over-year home prices started, nearly 40 percent of Bay Area homes listed for less than $425,000. Today, just 5 percent of the homes for sale on Zillow fit that budget.
“The prices are eye-popping,” said Zillow economist Jeff Tucker. The roaring Bay Area economy means a professional couple each with jobs in tech can afford a $1 million home, he said. Others hunt for bargains at the outer edges of the suburbs or deeper into cities.
Veteran Berkeley agent Eric Wong led a reporter and photographer from this news organization on a search for a $425,000 urban home with a shorter commute — say under an hour to the Financial District in San Francisco on a perfect day. The hunt excluded the counties farthest from the core region, Napa, Sonoma and Solano. Few Napa and Sonoma homes met the criteria, but about one quarter of Solano listings fell in that range.
That meant looking at East Bay homes in neighborhoods pock-marked by crime, deep poverty and decades of neglect. The communities remain home to many working families, sending children to neighborhood schools and keeping tidy, busy houses and yards.
Wong plotted a four-home tour through Richmond and East Oakland where local agents said fixer-uppers could be snagged for under $100,000 a few years ago.
The homes shared a few common features — around 1,000 square feet or less of living space, with security fences and gates, plus lockable and reinforced metal screen doors. Sometimes, a police helicopter hovered overhead. Some of the neighbors would never be in the running for the “best yard” contest.
Wong, 57, has been an agent for 17 years in the East Bay, working primarily in Berkeley, Oakland and El Cerrito. He wore a bow tie and professorial silver-rimmed glasses. The Berkeley literature grad can chat about Faulkner and Melville while pointing out the stylized features of Craftsman built-ins and the geological forces unsettling the foundation of a home.
He started his career selling in Oakland when few agents and buyers ventured there. He recalled another agent’s effort to sell a multifamily home in West Oakland. “A gunfight broke out in front of her,” Wong said. “Of course, the person still wanted to see the duplex.”
The first stop was a three-bedroom in the Belding Woods section of Richmond, a neighborhood packed with small lots and nary a side yard. It’s a 30-minute commute on a perfect day to the Financial District in San Francisco, but a mere five-minute walk from the rougher but now gentrifying Iron Triangle section.
The one-story on Costa Avenue was shined up for curb appeal, with fresh gray paint and white trim, and sculpted hedges. Inside, afternoon light poured into two small bedrooms and a smaller home office. The owners completely renovated the single bathroom of the 78-year-old home.
A hurried designer converted part of the unfinished garage into a family room, or at least assembled mismatched chairs and furniture at one end. “I wonder why they did this?” Wong asked. “You might prefer to have a garage than an extremely strange man-cave.”
Still, for the price, Wong said, “this is a tidy little house.”
Next, Wong guided the tour to three homes in East Oakland. On the way, a crash on the interstate choked traffic to a crawl for 15 minutes. “If you want to live here,” he said and shrugged, “this is what you have to deal with.”
One of Wong’s real estate colleagues, broker Denise Kees, grew up in East Oakland, and her family has been selling real estate in the neighborhoods there for nearly 30 years. The historically black community has drawn more Latino families in recent decades.
“East Oakland is probably the most affordable place on this side of the bridge,” Kees said in an interview. The crime rate has dropped in recent years, she said, although safety varies block by block. Her advice for first-time homebuyers: “Look with your own eyes. Don’t let old stereotypes and stigmas get in the way.”
The first Oakland stop was a two-bedroom in the 1300 block of 62nd Avenue, surrounded by a five-foot-tall, black metal fence, matching most of the fortifications in the Lockwood Gardens neighborhood. Transit was close. “Can you hear the BART train?” Wong asked.
He rolled back the gate and took a closer look at the World War II vintage bungalow. “The bars on the windows don’t help any,” he said. Inside, the refinished floors offered a bright spot in a space otherwise lacking many upgrades.
Wong quietly gathered in the details: a dated, shotgun kitchen, no dining room, a pair of small bedrooms and a fireplace. Wong broke the silence: “It would be really hard to fall in love with this house.”
The next home was a mile-and-a-half away on Halliday Avenue, through traffic on busy International Boulevard. The neighborhood grew as the maritime industry expanded, and workers needed convenient housing near the Oakland ports and shipyards. One spring afternoon a decade ago in this neighborhood, a parolee shot and killed four Oakland police officers.
The front of the Halliday Avenue home was painted tan, the back was painted white. A caged pigeon cooed in the backyard, near a tree with ripening peaches. “Oh, he’s got dirt in the backyard,” Wong said, a contrast to the concrete yards, or “hardscape,” at other stops.
The two-bedroom split level had the original, 1924 fir-wood floors, slightly bowed along the centerline. The aging Craftsman retained its built-in bookshelves and china cabinet. The freshly painted interior brightened the space. For $429,000, it looked in better shape than several properties in the neighborhood.
Throughout the visit, a police helicopter circled overhead.
The final stop on the bargain tour was about 10 blocks away, outside the circle of aerial surveillance. The 2000 block of 81st Avenue had a mix of multi-family apartments and century-old single-family homes.
The one-story Craftsman bungalow, painted grey with dark trim, had been on and off the market — and didn’t look a bit of its 93 years. Investors flipped the 770-square foot space into a modern, open floor plan for just under $420,000.
Wong pointed out the faux subway tile backsplash, modern kitchen appliances and recessed lighting. “For this price range,” he said, “this is very nice.”
Kees offered a cautionary note that some agents list East Oakland homes at artificially low prices to draw interest and sometimes a bidding war. And she isn’t shy about the education system. “Honestly, Oakland public schools have always been a mess.”
On the drive back to his office in Albany, Wong suggested a stop at 1310 Haskell St. in Berkeley, a recently redeveloped property. Originally an older, single-family home — typical and unassuming for its neighborhood, Wong said — it listed for $530,000 four years ago. A small developer saw the large lot as an opportunity to add more homes.
Multiple lawsuits, endless public hearings and neighborhood disputes later, developers cleared the lot and built three new condominiums two miles from the U.C. Berkeley campus.
A few showings drew heavy traffic. The three-bedroom, contemporary-style units — now called 13TenHaskell — boast high ceilings and sliding doors that open to landscaped yards.
Two of the three units were under contract within a month for more than $1 million.
“When you say a million dollars, it has a certain amount of gravitas to it,” Wong said. “I kind of shake my head when I say a million dollars.”
