Oakland’s Condo Glut Becomes a Condo Shortage
The condos from Jerry Brown’s 10K Plan have finally all sold out, and now Oakland lacks a supply of new condos and apartments.
Photo by Ramona d’Viola
Deputy City Attorney Jim Hodgkins bought one of the last new condos at Broadway Grand.
More than one decade after it was first conceived, almost all the condominiums built as a result of Mayor Jerry Brown’s push to bring 10,000 new residents to downtown have been sold, according to a report from the real estate marketing group Polaris Pacific.
And there is little new in the near-term sales pipeline.
At the time the report was released in December, there were just four new unsold condominiums on the market in Oakland and Emeryville, compared with nearly 1,000 in November 2011 and about 450 at the same time in 2012.
Many of the buildings were rented out after hitting the market at the beginning of the real estate crash in 2008 and 2009 and then sold off starting in 2012 as the market started to rebound.
Condominium construction peaked in 2006, two years before Brown left office, when about 1,500 units went on the market. That fell to about 500 units in 2007, 450 in 2008, and 300 in 2009.
However, not a single new condo went on the market in 2010, 2011, and 2012, and only a few were completed in 2013 and 2014, according to the Polaris Pacific survey. Apartment construction also came to a standstill following the real estate crash, falling from a high of about 800 new units released in 2008 to nearly zero from 2010 to 2014.
Among the condo developments that sold out in 2014 were Broadway Grand, a multistory 115-unit building on Grand Avenue near Broadway; The Bond, a 101-unit complex at 311 Second St. near Jack London Square; and Il Piemonte, a 25-unit mixed-use project at the corner of Piedmont Avenue and Pleasant Valley Road.
Broadway Grand sold its units at prices ranging from a low of $295,000 for a one-bedroom to a high of $690,000 for a 1,769-square-foot three-bedroom unit. Homeowners’ association dues range from $350 to $525 per month. The condos were rented out after the building was completed in 2008 and were brought back for sale in February 2012.
Prices for new condos rose 15 percent in Oakland in 2014 with sales volume up nearly 20 percent, according to Polaris Pacific.
There is some hope that inventory will increase in the near term. While no new condominiums were under construction in Oakland at the end of 2014, plans for 4,101 new units have been approved. Apartment construction is somewhat livelier with 204 units under construction in Oakland and 3,906 approved.
The challenge that Oakland faces is that the cost of condo construction is roughly the same as in San Francisco, but selling prices are lower, said Miles Garber, vice president of research for Polaris Pacific.
One 88-unit project at 495 22nd Ave. at Telegraph is in the approval process with the Planning Commission, and there has been interest from three developers in the block known as the Uptown parcel next to the Fox Theater, Garber said.
“Oakland is a great market, and prices have increased enough to make new projects pencil out,” he said.