East Oakland Multifamily Market Report
Market Overview
Supply pressures in East Oakland due to population growth and stagnant leasing are impacting multifamily occupancy rates. Additionally, the last remaining professional sports team in Oakland, the Oakland A’s, is relocating to Las Vegas, sparking conversation about its impact on the area. Nevertheless, neighborhoods bordering Lake Merritt and Downtown Oakland remain popular because of the rich culture and urban amenities.
Market Performance
- Delivered (units): 749
- Absorption (units): 225
- Vacancy rate: 9.0%
- Asking rent growth: -0.9%
Past 12 Months | Source: CoStar Group
Vacancy
Strong renter demand over the past year has brought net absorption to 260 units. As a result, the vacancy rate in Q2 2024 was 9.0%, increasing by nearly 300 basis points over the last year. Vacancy rates are expected to reach higher levels as new projects enter lease-up phases to work toward stabilization. Despite several proposed development projects in the submarket, there is no active construction as of Q2 2024 because of high construction costs and loans.
Rent
Limited incomes and aging complexes have contributed to a decline in asking rents. Rates in East Oakland average $1,780/month, at the bottom of all East Bay submarkets, which collectively average $2,400/month. Despite minimal new property developments and steady population growth in the region, rent increases have been moderate. With relatively affordable rents compared to the larger metro area, East Oakland has experienced a minor decrease in rent growth at -0.9% year over year.
Sales
As of Q2 2024, East Oakland is experiencing a slowdown in annual transactions. In the last year, there have been 28 recorded transactions, a decline from the previous five-year average of 55 trades. Current sales volume has stabilized at $43.5 million, and there are expectations of a possible decline in the upcoming quarters due to credit conditions affected by the Federal Reserve’s efforts to combat inflation. Despite the undersupply pressure, leasing has been on the rise in recent quarters, indicating a certain level of market stability. This stability, despite the current challenges, should reassure investors of the market’s resilience.
