Homes and apartments have always been said to appreciate in value over time, however, things are looking quite different for the people of California and instead of their properties getting more expensive it’s been doing the opposite.
A lot of individuals who own properties in some parts of California’s residential areas have had no other choice than to reduce the selling prices of their homes by as much as 40%. They’re now selling homes they purchased at high prices during the pandemic for ridiculous amounts.
A Drastic Price Slash
Real estate in California has been taking a toll recently and it’s not looking good at all. A very beautiful five-bedroom apartment in the city of Oakland was recently sold at an unbelievable price.
The property was initially listed on the market for $4.1 million in late March of 2022. It’s shocking to see that this same property is back on the market and this time it’s going for $2.55 million with a drastic 40% price slash.
It Was On The Market For More Than Sixty Days
Realtor Matt Castillo from the San Francisco Bay Area felt the need to let people understand how bad the California Housing economy has become. He took to his Twitter (X) account and tweeted “Oof”.
He further mentioned that, when he first heard about the property in Oakland, it was listed for sale for the amount of $4.1 million. He expressed how shocked to see that fast forward to 2024 the same property is back on the market and is being offered for a lower price.
The Buyer Overpaid When They Bought in 2022
Looking back at when the property was listed in February 2022. It was listed for just $2.995,000. The most surprising thing is that the same property was later sold for a whooping sum of $4.1 million.
If we’re getting our calculations right, then that is about 1.1 million more than the actual asking price. It is safe to believe that the buyer was influenced by the rapid increase following the pandemic.
Oakland Is Having A Terrible Moment
Things are tough in Oakland right now. Everything has been going the wrong way, property prices are getting slashed and interest rates are still significantly high.
One of the challenges facing the city includes the fact that several significant retailers have been forced to close their stores located within the city. A decline in the retail business of a city will surely have implications.
The Increase In Retail Theft And Its Consequences
There is one major reason why business owners have all decided to pack up and leave. According to reports, recently the city has been experiencing a high level of retail store theft and other criminal activities.
The consequences of these acts now pose a threat to the well-being, safety, and security of both the customers who visit the stores and even the staff members of those stores.
Even Property Tax Has Dramatically Increased
According to information from Redfin, a real estate brokerage company, they mentioned that the property tax owed on the home has experienced a dramatic increase over the years.
Just in a few years, the property tax has gone up by 125.3% from 2022 to the year 2023. Can you imagine, that means that the property tax amount went from $26,319 to a whooping sum of $59,307?
The Price Slash Cuts Across Several Areas
In case you think the current trend of housing price slash only applies to the Oakland apartment then you’re wrong. This is a representation of what is going on in the entire city. Several other houses have had no choice but to apply a price slash.
In a bid to explain this further, journalist Lance Lambert took to his Twitter (X) where he wrote about the decline in home prices within the areas with 94610 ZIP codes. According to him, houses in this area have now gone down by 16.7% compared to 2022.
Houses in North California Are On Sale For Lower Prices
A good number of areas in the northern part of California have had their home prices come crashing down. The particular data used to compile these numbers were obtained from Zillow.
Lambert went ahead to share this information on ResiClub, he mentioned that a lot of these northern California homes are currently being listed for lower prices than it was in the year 2022.
But Prices Have Somehow Increased In Southern Californian States
Although Northern California is experiencing a recession, homes in Southern California and other states have found a way to bounce back in the past year.
Lambert also mentioned that local markets with the inclusion of Oakland and San Francisco are still trying to recover from the recent technology issues from the technology sector. They have also been trying their best to adjust to the widespread use of AI.
The Prices Of Properties In California Are Still Relatively High
Irrespective of the ridiculous slash in home prices in California, prices of homes in the state are still relatively high and surprisingly this includes Oakland. According to Zillow, an average home in California costs about $765,197 and this is way above the prices of homes at the national level.
The fall in price doesn’t affect the California housing market, despite the fall, the state is gradually getting back to its 2022 prices ranging from $765,345 and higher.
Shortage Of New Properties
The California housing economy has been able to bounce back because of certain factors. The state has been going through some supply shortages, and this has been directly affecting the state’s housing economy and the state at large.
The fact that there are some stringent rules concerning the building of new properties makes it difficult for those who have projects they’re working on. This has relatively caused the prices of homes in the state to increase.
Oakland Home Prices Even Higher!
According to the reports, the five-bedroom home in Oakland was sold for a good price. The home had an increase of about 45.7%.
If we are going to compare this price to its initial listing price in November 2022 which was going for about $1.75 million. This looks like a good increase over the years. While in some areas house prices are plunging in other areas they are going up by the day.
