Berkeley housing prices projected to increase next year, mirroring Bay Area trends – Daily Californian

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With the median price for a single-family home in the Bay Area reaching $1.46 million in May — a 12% increase from last year that nears a record $1.5 million median price set in April 2022 — Berkeley’s housing market remains an outlier with its current decline in prices. 

However, it is anticipated that prices in Berkeley will follow the upward trend within the next 12 to 18 months, according to Oscar Wei, deputy chief economist at the California Association of Realtors, or CAR. 

In Berkeley, median home prices in May were around $1.5 million, a 6% decrease from last year, according to CAR housing market data. Wei noted this dipped almost 20% below the 2022 peak of $1.85 million.

Wei explained that housing prices in Berkeley have “not been holding up as well” as the rest of Alameda County and the Bay Area, with the median price in Berkeley continuing to show negative yearly growth for the seventh consecutive time.

While this year’s median household price is down from 2019 by almost 10%, it surpassed the rates seen in 2016-18. Wei noted that sales of existing single-family homes in the city “bounced back” from the market a year ago, but continue to remain below trends seen in 2021 and 2022. 

Noting that the income required to purchase a median-price home of $1.5 million in Berkeley is $331k per year, Wei believes the housing market will become more affordable as interest rates decrease, but noted that “challenges will remain in the upcoming year.”

Although housing supply is anticipated to increase as interest rates lower, he added that the market will remain tight and will likely cause Berkeley’s median home price to trend upward over the next 12 to 18 months. 

“While there will always be price fluctuations in the market in the short term, home prices typically go up in the long run,” Wei said in an email. “As long-run investments, real estate will always be a safe bet.”

Jeffrey Neidleman, a broker associate realtor with offices in Alameda, Berkeley and Oakland, said Berkeley’s housing market continues to be a “very desirable marketplace” due to its new construction projects, public school reputation, transportation accessibility, local shops and dining, UC Berkeley’s participation in community events and the “look and feel of the older housing stock.”

Berkeley’s housing market remains “competitive and pricey,” Neidleman said, with median single-family home prices surpassing those seen in Oakland, Richmond, Albany and El Cerrito. He noted that Alameda County ranks as the sixth most expensive out of the 11 counties in or bordering the Bay Area.

Neidleman anticipates “strong buyer demand” moving forward, especially if supply remains limited. He said this trend in the housing market could lead to increased living costs as rising transfer taxes, ordinances requiring eco-friendly property improvements and added charges to property tax bills all increase across the Bay Area. 

“It is always a good time to sell and buy real estate,” Neidleman said in an email. “As a seller – assuming you know where you are going and why you are selling – this is a good time to maximize any possible net equity. As a buyer, you have options to buy into a market right now where there are more properties available which are taking longer to sell and may not be as competitive.”

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