Oakland is a draw for people in neighboring San Francisco who are looking for cheaper property to buy or rent, not that Oakland is cheap itself. In 2015, Zumper rated it the fifth-most-expensive city in America. San Francisco is the most expensive, with the median home price in 2015 going for just over $1.1 million.

Market Insights

By May 2016, Oakland had become San Francisco's most desirable neighbor, with the high prices of San Francisco's real estate market causing brand names to flee eastward to Oakland. Companies such as Uber, Brown & Toland Physicians, the Sierra Club, CoreLogic Inc. (NYSE: CLGX), Rubicon Point Partners and Canyon Capital Advisors relocated to Oakland for cheaper and less regulated options. Other companies included software businesses and nonprofits. Artists and creative types also left San Francisco for Oakland.

On the residential turf, housing is cheaper than San Francisco but still expensive. In October 2015, Trulia ranked the city third in its share of million-dollar homes. This was topped only by San Francisco and San Jose. In February 2016, average apartment rents within 10 miles of Oakland soared to $3,580, while one-bedroom apartments in Oakland averaged $2,986 a month. In comparison, in that same period, one-bedroom apartments in San Francisco rented for $3096 a month, and two-bedroom apartments rented for an average of $4126, according to that same website.

The thriving retail sector also bumped up its average retail rents to $24.14 per square foot in 2015, a 6.1% increase from the year before, according to Marcus & Millichap. The company noted that retail demand is highest in the entertainment, goods and service niches.

In short, San Francisco's commercial and residential prices drive buyers to neighboring Oakland where residents seek more functional and comparatively cheaper lodgings. Nevertheless, Oakland home costs are high. On the other hand, in 2015, observers speculated that San Francisco prices were leveling while those in Oakland were growing.

Property and Transfer Taxes

Proposition 13, a law passed in 1978, stipulates that property taxes in California are limited to 1% of a property’s market value, but homeowners actually pay more, since assessors add bond indebtedness to the rate. This includes payments that go to schools, libraries and other such institutions. The total varies according to region. Oakland, which is in Alameda County, imposes a base rate of 1%, with a maximum bond indebtedness of 0.44% and an average tax rate of 1.2%.

Transfer tax refers to a tax paid by the buyer, the seller or by both parties when property transfers from one party to another. Transfer tax depends on the property's sale price, and in Oakland, it is generally paid by the seller. As of 2016, transfer tax for Oakland, in Alameda County, was $1.10 per $1,000 of the total property value.

Most Expensive Neighborhoods

As of 2016, Oakland was polarized between the popular hills district and the lower-income flatlands. A 2015 Zumper report noted that residents in the city's downtown and trendier northern neighborhoods, such as Temescal and Rockridge, paid approximately 30% higher housing costs than those in the southeastern flatlands. Downtown Oakland and parts of Lake Merritt and Chinatown also became more popular as retailers and businesses pitched companies in these regions.

Best Real Estate Websites

Brian Santilena helps readers navigate the changing real estate districts of Oakland, Berkeley and Piedmont in his "Homes in the East" website. The City of Oakland Real Estate website cycles property that is available for sale and for lease and summarizes Oakland's real estate services. The Grubb Company Realtors services a higher-end market, with luxury homes in Piedmont, Berkeley, Kensington and Oakland. Pacific Union covers a more eclectic environment that spans from urban and suburban markets to the hill and forested districts.

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