Salmon, if you’ll pardon me, is full of ****.

First: Manhattan prices do not always go up. In fact they have gone down in the past, and will do so, after the financial industry gets done with the current bloodletting in another 12-18 months.

Second: Schools in Berkeley aren’t really that much better than Rockridge, etc.

Third: There is obviously demand in “good” areas in Oakland. The pricing is skewed by massive foreclosures in West&East Oakland.

Fourth: If prices drop more in decent areas of Oakland, people will move that whole 5 minutes over the border. This area IS NOT Manhattan, or even SF, where the former is an island, and the latter is pratically one. Berkeley and Oakland are separated by surface streets, not water or mountains or even rivers.

This reasoning is silly and follows from flawed data.

Very misleading. If you look more at the very same Altos site, you’ll see the median price per sq ft in Berkeley has been absoultely flat this spring, not rising. An example of how the median doesn’t always tell what’s going on.

Actually, I think he’s a little off on this–Oakland is a very neighborhood-based market. You’re seeing such stark differences because, relative to Berkeley, Oakland is huge–and “undesirable” neighborhoods (unsafe and/or poor schools or housing stock, etc.) and East Oakland foreclosures constitute a much higher percentage of overall homes on the market. But if you limit your lens to, say, Berkeley’s hot ‘hoods (North Berk, Westbrae, Elmwood, hills, etc.) and Oakland’s similarly hot ‘hoods (Rockridge, Lakeshore, Crocker Highlands, Hillcrest area, etc.) you see pretty similar trends, both in terms of prices and in terms of spillover into nearby neighborhoods. Even in our fairly run-of-the-mill Oakland neighborhood (mediocre school, not a “trendy” neighborhood) we’ve seen a couple of recent listings go significantly over asking (and more surprisingly, well over $500/sf, which I thought was long gone in the flatlands).

The bottom line, I think, is that it’s a buyers’ market, and buyers (and banks) are being cautious. So the “good” homes are still going (even going strong, in some areas), while people have the freedom to pass on the “bleh” homes and neighborhoods. (And in Oakland specifically, I think many fewer families are willing to gamble on a border-line neighborhood improving in the near future, whereas five years ago, many buyers were willing to take a chance on Fruitvale, West Oakland, etc.)

Is that chart list price or sale price? Inventory is steadily stacking up in Berkeley, and a lot of listings are sitting on the market because they’re overpriced.

I think the second chart on the Altos blog shows the folly of this kind of 1-1 comparison, though I’m not sure what “Median Inventory” is. Oakland is four times the size of Berkeley. In order to show Oakland’s increasing inventory, they need to use a scale that is too large to reflect Berkeley’s increase.

Toady said inventory was steadily rising in Berkeley- is there any statistic I can read that supports this? We peaked on inventory some time ago in the south bay and are working through it.

Michelle, this link isn’t for the entire south bay, but even so I am sceptical that inventory there is decreasing:

http://www.housingtracker.net/askingprices/California/SanJose-Sunnyvale-SantaClara/

OMG! How could this guy compare Berkeley to MANHATTAN? Is he serious?

Every time I read a Berkeley blog on this site, I am truly shocked at how over exaggerated and subjective it is compared to other area posts.

RE report trends at a glance for Santa Clara county, Single family homes only:

Days of Inventory
May 08: 216
Apr 08: 298
May 07: 152

C’mon. Markets are totally local in our area - there aren’t huge tracts of identical houses that were all built around the same time that are generally equal except for floor space. There is no technical analysis to perform on real estate median price graphs for large, highly variable geographic areas with wildly varying crime rates, housing stocks, and amenities. A relative just bought a house in lower Rockridge for the same price they would have paid in North Berkeley, and other properties in the area had more than a dozen offers. I rarely hear about a place in N.B. having more than 2. I am going out on a limb here, but I bet West Berkeley and South Berkeley are declining significantly, the hills have been in decline for quite a while, and north berkeley has held in there with quality properties still going up, while busy corner properties and bad floorplans go through multiple price reductions over months before they are sold. The market is in turmoil, and I can’t see a general direction. But the graph shows more about the types of properties selling in each area than any overall trend in specific areas.

Thank you for all your comments folks. I am currently in Umbria doing some ultra important research on the Italian property market.
Your insights are as valuable as ever. Grazie.