What does $2 million get you in Oakland, California? An awful lot. Today, let’s wrap up the What the Money Bought series in Oakland with the $2 million price point.
We’ll talk about the changes we’ve seen over the last four years at this particular price point. Similar to the previous ones, we’ll also look at what this amount actually gets you and some noteworthy stats that, hopefully, will give you some intel if you’re specifically looking at this price point.
By the way, I also did blogs for the $1 million and $1.5 million price points here in Oakland, and you can also click on these links if you want to check them out. I also did a series similar to this for Alameda, and you can also check that out by clicking on these links: $1 million, $1.5 million, and $2 million. But, for now, we’re going to look at the $2 million price point in Oakland, California in the last four years.
Number of Houses and Days-on-Market (DOM)
Compared to the previous price points, fewer houses were sold at the $2 million mark from 2018 to 2021. In 2018, there were only eight houses sold at this price point. On the other hand, in 2019 and 2020, there were only seven and five, respectively. In 2021, the number of houses sold for $2 million was 10.
Furthermore, the eight houses sold in 2018 had an average days-on-market of 29 days. In 2019, it took only an average of 12 days for homes to sell at the $2 million mark. On the other hand, in 2020, the average DOM was 14 days. Then, in 2021, those ten houses had an average DOM of 18 days.
As I’ve mentioned earlier, fewer houses were sold for $2 million than at the other two price points we’ve discussed before. If you remember, there were 20 to 40 houses sold in the $1 million and $1.5 million price points. That is a stark contrast to the total number of houses sold each year at the $2 million price point. So, generally, the DOM is slightly skewed based on how few homes were sold at the $2 million mark. A slight difference in the number of DOM for one house would hugely affect the average DOM of all the houses sold in a particular year.
Beds and Baths, and Size
According to the data, in 2018, houses sold for $2 million in Oakland had an average of only 3.6 bedrooms. In 2019, that average increased to 5.14 bedrooms per house, 1.14 more than in 2018. On the other hand, in 2020, the average number of bedrooms in homes sold for $2 million was 4.20. Then, in 2021, the average number of beds at the same price point was 4.4.
Furthermore, there was an average of 3.43 in terms of bathroom count in 2018. Among the four years, that one had the most bathrooms for the houses sold for $2 million. However, unlike the bedroom count, the bathroom count didn’t change that much in the three years that followed. The average number of bathrooms per house in 2019 was 3.28. On the other hand, the recorded average number of baths for homes in 2020 and 2021 at the same price point was 3.15.
In terms of bed-bath count, houses sold for $2 million in Oakland didn’t differ significantly from those sold for $1.5 million. In other words, there is no marketable change in terms of bed-bath count.
On the other hand, according to the data, homes sold for $2 million in 2018 enjoyed an average area of 3,788 ft.2. In 2019 and 2020, the average size of homes sold for $2 million was 2,824 and 2,334 square feet, respectively. In 2021, homes sold at the same price point had an average size of 3,196 square feet. As you can see, the average size of the houses has gone a little bit all over the board. This is also probably due to the scarcity of properties that have been traded at the $2 million price point. So, I’d say that there is not a lot to pull from that.
Number of Bedrooms and Bathrooms
Moreover, in 2018, the average number of beds in the houses sold at this particular price point was 3.16. There were more bedrooms, on average, in 2019 and 2020, with 3.5 and 3.45 bedrooms, respectively. Homes sold for $1.5 million in 2021 have the lowest average number of bedrooms, with only 2.7 bedrooms per house. There is nearly a half bedroom less compared to 2018 and almost one full bedroom less than in 2019 and 2020.
Unlike the bedroom count, which except for 2019 had an average of 2.7 bathrooms, the average number of bathrooms of homes sold at $1.5 million almost stayed the same. On average, there were 2.33 bathrooms in 2018, 2.27 in 2019, and 2,29 in 2021.
Based on those numbers, the makeup of the houses and how quickly they sold didn’t change all that drastically. That is surprising because homes in Alameda and other price points have become much smaller in terms of area. Granted, the numbers changed a bit, but it’s not like the drastic change seen in some of the other markets and price points.
Number of Units Sold for more than $2 million
I think that that is really a fascinating market stat to pay attention to. It shows a general trend for Oakland that you might want to watch for, I’d say. It shows a trend similar to what we’ve seen in the $1 million and $1.5 million price points. Undeniably, based on the data, the number of units sold over these three price points is growing. More people are going up and transacting at that upper price point. It’s really fascinating to see how the market is being pushed up. In addition, this is a trend that I see not only in Oakland but also in Alameda and probably in other cities, too.
I think the reason for that trend is that people are coming over from the Peninsula and San Francisco. That movement of people to the East Bay has really taken hold, and you’re seeing it in these numbers. People feel they’re getting more value for their money here in Oakland than in San Francisco. Thus, the migration to the East Bay. So, that is a significant factor that we’re experiencing here in Oakland at that $2 million price point.
Total Number of Houses Sold in a given year
According to the data, 3,879 houses were sold in 2021 alone, 369 more homes than in 2020, with 3,510 houses. In 2019, there were 3,476 properties sold that year, which was 403 fewer than in 2021. With just 3,447 homes sold, 2018 was the year with the least number of homes sold out of the last four years.
Fascinating, isn’t it? Based on those numbers, it’s not necessarily true that there’s a lack of inventory. Instead, this means that there are a ton of buyers and competition fighting for these units of inventory. As a result of this buyers’ competition, the prices are being pushed up. Consequently, the market is being driven to a somewhat unprecedented level.
List Price vs. Sales Price
In other words, the percent difference between the listing and final sales prices was 12.34%. In 2020, the average listing price of the five houses sold for $2 million was $1,595,200. That means that sellers that year enjoyed a hefty 25.35% increase in the final sales price over the listing price. In 2021, the average listing price of homes sold for $2 million was $1,806,000, or a percent difference of 10.79%.
So, as you can see, the list price to sales price ratio is hovering in that 10% range over the asking price. Given the higher price point, this is somewhat typical, where you would expect that to be a more transparent strategy in the years past. The market used to be in that 6% to 12% world at this $2 million price point. Then, as we all know, 2020 came, and COVID happened, which bucked the trend for the first time. After that, in 2021, we’re back to that 10% average difference between the list price and the sales price again. COVID really did a real number on the averages for one reason or another.
Dollars per Square Foot
Looking at the $/ft2 and the percentage difference between the listing price and the sales price, one might say that the averages are all over the place. Well, that would be a fair observation, to be honest. However, that irregularity in the numbers is due to the scarcity of houses sold at the $2 million price point.
Just like what I said earlier, even just one outlier in a small data set would significantly affect or skew the average of that whole set. For example, in the $1 million and $1.5 million price points, the number of houses sold each year ranges from 20 to 40. Unlike in those larger data sets, an outlier wouldn’t affect the average of the whole group as much as it is in a smaller data set. That’s why at the $2 million price point, where the number of homes sold each year only ranges from 5–10, just one outlier would greatly skew the averages.
In conclusion, there aren’t a lot of houses sold at the $2 million price point. And because of that, it only takes one house, one outlier, to skew the data in one direction or another. This makes it harder to pull trends at this price point than we did at the $1 million and $1.5 million price points.
That being said, the two things I think are really important to pull from this blog and this series, in general, are the number of units that have been traded this year. The number of houses sold this year way exceeds what we’ve seen in the last three years before 2021. More units have been sold, and the turnover is higher. We’ve also seen how the buyers’ competition pushes the market up, as indicated by the increasing number of units sold above the $2 million price point.
As more competition pushes the price point, more units end up being traded above the $2 million price point. Also, even though more units are available to buy, there are still more buyers competing for these available properties, so it’s really an interesting thing to pay attention to in this market. If you want to be competitive in this market, then this is something you really need to understand before you jump into this marketplace.
I hope my blog and video on what the money bought in Oakland, California for $1.5 million has helped you.
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What the Money Bought in Oakland, California — $2,000,000