Oakland, CA for under $400K, and a tale of 2 cities [The Real Estate Economy]

What is the difference between these 2 properties, other than $200,000?  More than the Bay Bridge, which connects San Francisco and Oakland. It reflects a cultural divide, or more accurately, a metro branding issue.

In real estate terms, San Francisco has a luxury brand — Oakland don’t. Compare these two listings.

In this follow-up to my morning post, I managed to find another detached in Oakland for under $400K, i.e. within qualifying range for our hypothetical creative-class worker. 1346 East 26th Street = $399,000.

A comparable in San Francisco, 86 Blair Terrace, is up at $598,000. The listing optimistically claims

I think it’s fair to say that both of these properties are in transitional neighborhoods in their respective cities, and they’re both 2 bedrooms with garages and roughly the same square footage. Let’s add $50K to the cost of the one in Oakland to give it some of the bells and whistles already present in the SF home, and award a $50K premium to the latter for its bucolic yard.

That still leaves a yawning $100K differential in the asking prices, and trust me, this is a generous comparison. The one in Oakland is a stand-alone house; the SF property is a townhouse.

"Between you and me, I’m surprised that (the Oakland) property hasn’t moved," says Jeff Banks, the Coldwell Banker agent who is repping the listing. "It isn’t a high crime neighborhood. My client is a widow whose husband died. They lived there for 40 years and never had a single incident."

Jeff says that before he takes any listing in Oakland, he walks the neighborhood and nearby parks or rec centers to check for gangs. While he says this neighborhood is clean, he acknowledges Oakland’s branding problem.

"A lot of agents won’t go there. A lot of homebuyers won’t look there. But once you get out and explore some of these places in Oakland it’s not as bad as the media makes it out to be." Point taken.