Looking to buy a home in Oakland, Calif., and want to optimize the timing of your purchase? In the past few years, the real estate market has been quite hot, with homes going significantly higher than the asking price, igniting bidding wars among buyers.

It’s no wonder Oakland is a focal point for homebuyers and sellers. Residents enjoy its urban amenities and proximity to San Francisco, San Jose, and wine country. Whether you are a first-time homebuyer or simply looking to upgrade to the house of your dreams, Oakland has attractive pricing for the Bay Area, excellent weather, and more spacious homes than in the city.

So, the big question is will 2023 remain a seller’s market or begin to transition to a buyer’s market? Oakland remained a seller’s market through the end of 2022. However, recent trends prompt questions about when the market could shift back in favor of buyers.

Let’s explore the key factors that play a role in where the Oakland housing market will be in the new year.

The past few years brought extreme conditions in favor of sellers nationwide. Most markets were hot, if unsustainable. And as the economy has cooled in recent months, some wonder whether real estate markets could see a shift toward the other extreme.

Crucially, not all markets within the U.S. are equal. Even common denominators like the Federal interest rate affect different markets differently. So while it’s possible to see a pattern of decreasing home prices, the degrees to which prices cool are very location dependent.

In 2022, home mortgage interest rates were the main story. After all-time low rates in 2020 and 2021, the Fed drastically increased interest rates, causing some homebuyers to pause their searches. Higher mortgage interest rates equate to higher monthly payments, so it’s no surprise a segment of the buyer population was priced out.

You would expect high interest rates to cause a drop in demand, resulting in less competition for buyers still in the hunt for their dream homes. To some extent, that’s true. In places like Oakland, the luxury market has remained robust, with single-family dwellings selling for over the asking price. As we will see, Oakland real estate continues to appreciate (just at a slower rate). So buying a luxury home in Oakland is still likely a safe investment in the long term.

The San Francisco Bay Area experienced robust appreciation from 2020 through the first part of 2022, then a slight decrease in appreciation (expected to continue into 2023). The market is cooling, but prices are still appreciating — just at a slower rate than before.

There is much to recommend Oakland. The real estate market is competitive, and Oakland luxury homes remain hot properties. Investors love the variety of residences in “The Town.” Tour this eclectic city and see converted warehouses, artist lofts, and palatial estates. Oakland has character, and its community is like no other (the beloved Oakland A’s baseball team epitomizes the city’s brand of unconventional optimism).

In keeping with its singular arts and culture scene, Oakland is a unique real estate market. As a Bay Area city, it is subject to complex factors like venture funding and stock market fluctuations. Still, Oakland’s prime East Bay location continues to draw newcomers in many demographics — startup employees, academics, retirees, new families — and anyone who loves its mild climate.

Although the rate of appreciation is slowing down, prices are at a premium in the Oakland area as the inventory of homes is still relatively low. The lack of new builds is warping the market in favor of sellers. Look for inventory to increase in 2023 yet remain low enough to drive buyer activity.

You can expect homes to sell quickly in Oakland — it’s typically a matter of weeks, not months, before high-end properties meet their buyers.

As for prices, the competitive Oakland real estate scene is fueled by steady demand. When you monitor the market daily, like Allie Pembleton, you regularly see selling prices outpace asking prices. A home listed for $1 million might go for $1.5 million or more. And the best-marketed homes can attract double-digit offers. As soon as one buyer sees a lovely property, word spreads like wildfire.

Between low inventory and steady demand, Oakland is categorized as a seller’s market entering 2023. However, luxury buyers should not be deterred from bidding on homes they love. For would-be investors, Oakland is a unique situation where buyers and sellers each stand a chance of coming out ahead.

You can expect home prices to drop less drastically than in other cities. Oakland’s location, climate, and modest inventory will continue to drive sustained demand in 2023. The big question is whether 2023 will shift away from a seller’s market. In a nutshell — yes, there will be a shift, but it won’t become a buyer’s market overnight. Buyers will begin to exercise more negotiation power on both price and terms, but ultimately the sellers will still have the upper hand.

To stand out from the competition, buyers should work with a trusted local agent like Allie Pembleton, who can maximize their assets toward a competitive offer. One strategy she recommends is making a cash offer. A cash offer can make the seller’s decision simpler if your funds allow it. Moreover, cash offers make interest rates irrelevant because they don’t include mortgages.

If you are considering selling or purchasing a home in Oakland, begin your search with Allie Pembleton, a trusted and experienced realtor. She can help you on the path to finding your dream home with ease. Please browse Allie’s testimonials, portfolio, and resources for buyers and sellers. Contact her team at your convenience and find out how many clients love working with Allie.