By Jennifer Riner
The fears and hesitations that are standard in home buying intensify for many young couples looking to put down roots in the East Bay. Part of the problem lies in the lack of inventory, but high home prices are the key problem. Not knowing what development is planned for a particular neighborhood doesn’t help.
A couple in their late 20s or early 30s might arriving from out of town may not know what to expect when it comes to navigating the East Bay real-estate market for a modest home. But the priority list is relatively straightforward: comparative affordability, transit accessibility and good schools. Given these parameters, here’s how their starter-home search might play out.
What’s the budget?
The idea of a starter home varies greatly depending on location. The California Association of Realtors (CAR) estimates the current median sales price in Alameda County is $755,000, up 3.2% from one year ago.
“I would say, in general, one should expect for a starter home of two bedrooms to spend around $600,000 – and of course not everywhere, but that will theoretically get you in the door in parts of Oakland, El Cerrito, certainly Richmond,” said East Bay Realtor Scott Ward of Marvins Gardens Real Estate.
What you can get for that price varies widely depending on where you look in the East Bay, said Ward: you might be looking a condos with shared amenities, single-family homes with yard space or townhouses..
Ward said the decision may largely depend on how long a young couple plans to stay. For most, the starter home lifespan is seven years, but he sees more buyers approaching their first home purchase with long-term mindsets, paying closer attention to yard space for potential kids, for example.
Where would they live?
As reliance on cars becomes less attractive, accessibility to public transit is becoming more important.
“Transportation tends to be one of the biggest drivers for young people getting their first home,” said Ward.
With a stricter budget many young buyers often search within up-and-coming neighborhoods around the East Bay where public transit brings with it the convenience of retail, commercial and restaurant choice.
The development boom near the MacArthur BART station suggests this heightened demand for public transit. The BART parking structure in Temescal was recently finished, complementing a 90-unit apartment complex called the Mural that opened last spring. This ongoing real-estate expansion, coupled with new bike lines and rentable offices, is particularly desirable for Generation Y home buyers.
Currently, a Victorian home on Brockhurst Street in Temescal offers three bedrooms and two bathrooms at $589,000. The home is within walking distance to BART and neighborhood amenities.
West Berkeley is seeing new housing growth, albeit some of it controversial. The pending mixed-use project at 1900 Fourth St. on the Spenger’s parking lot has come under scrutiny with opponents expressing concern over potential interference with Native American shellmound land. The proposed development would bring 30,000 square feet of retail, 155 market-rate and affordable apartments and public parking to West Berkeley.
At the moment, the lowest-priced home for sale listed on Redfin in West Berkeley is a fixer-upper at 1309 Ward St. for $625,000 – just across the street from San Pablo Park. The 3-bedroom, 1-bathroom listing describes the home as needing “lots of TLC,” but it is conveniently located only a mile from the Ashby BART station. Listing agent Cheri Hunter said the property will likely go to an all-cash investor.
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Images in slideshow above courtesy of Cheri Hunter, BHHS Drysdale Properties
Meanwhile, the Fruitvale Transit Village in Oakland, a 255,000-square-foot mixed-use building filled with commercial, retail and housing space, is bringing more buyers to the immediate area. Even Google is renting commercial space in Fruitvale, which will host an education center focused on technology and entrepreneurship, the San Francisco Business Times reported in October.
A 2-bedroom plus den, 2-bathroom craftsman-style home is listed in Fruitvale for $539,000. See the listing details.
San Leandro is witnessing a major construction boom, too, judging by the City Council’s recent development update. The newly built San Leandro Tech Campus on Alvarado Street and the Marea Alta affordable-housing development currently border the San Leandro BART station.
A little over a mile away from the San Leandro BART station is 526 McKinley Ct., a 2-bedroom, 1-bathroom home listed for $549,000. Aside from charming interior features and a prime cul-de-sac location, the home includes a separate studio dwelling for an office or music room.
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Images in slideshow above courtesy of Farrah Wilder, The Wilder Group, Pacific Union and Christie’s International Real Estate
Schools matter
Because more first-time buyers want to stay put longer, checking nearby schools is an essential aspect of a buyer’s due diligence. Even for couples who don’t plan on having children, school districts often impact property values and resale potential.
According to GreatSchools, a nonprofit education information resource for parents, Alameda County schools score an 8 out of 10, on average. Lincoln Middle (6-8), Amelia Earhart Elementary (K-5) and the Alameda Science and Technology Institute (9-12) rank the highest in the county.
Buying in a not-so-hot school zip code isn’t necessarily a bad investment, Ward said, especially as more local parents and neighborhood organizations focus on institutional enrichment.
“If you look at the capacity for a community to try to make their local school better, I think there is a better blueprint than there was ten years ago,” he said. “It’s clear from those parent meetings that while it’s a difficult road by every imaginable stretch, it’s doable.”
Millennials starting their East Bay home search have a lot to consider, but patience is key. Given the wide disparity between list and sale prices in Berkeley, buyer competition and bidding wars can weigh on first-time buyers who aren’t familiar with the local market.
“There are two things that I talk about with first-time home buyers: don’t get discouraged and recognize it’s a process,” said Ward. “There’s that journey of figuring it out, which good agents are a part of.”
