What is the best Bay Area investing market?

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The Best Bay Area Real Estate Markets to Start Investing Now

Wanna start purchasing real estate in the Bay Area? Well, don't put your hard-earned cash in the wrong location. Spoiler alert: It's not San Francisco, San Jose or the Peninsula. Find out why these specific markets are poised to multiply in value over the next 5 years.

Over the last decade, we have been absolutely spoiled with property value appreciation here in the Bay Area. But, some local markets have lagged behind the gentrified metropolis that the Silicon Valley has become. The Bay Area neighborhoods that got left behind are the next locales expected to jump in value over the next 5 years and as all savvy investors know; the next five years are paramount in comparison to the last five years. So, we should all be concerned about how our portfolios are developing and the fluctuations that are occurring in our investment locations.

The corona virus is slowly eroding the Silicon Valley real estate market. In response, some investors are making their move to the East Bay to capitalize on lower barriers to entry and hopeful long-term appreciation.

Union City, Hayward and San Leandro Top Our List of the Best Bay Area Markets of 2020

The fact is that these three cities have a few valuable things in common. They are towards the beginning of the gentrification curve, their values aren't over-inflated and they are poised to attract more home-buying interest than their competitive counterparts. Let's talk a little about what sets these markets apart.

Union City

Is similar to many other smaller communities in the Bay Area in the sense of its culture and inhabitants. Unfortunately, the city never experienced huge hikes in population due to it's lackluster approach to business development within its city-limits. Larger, more sexy, areas nearby like Berkeley and Oakland stole the progress that could have gone towards this quaint community. Ultimately, Union City is behind its competition and that presents a lingering opportunity for an experienced or novice real estate investor. Here are the main takeaways about the market that you absolutely need to know:1. Union City has only gained 20,000 in population since 1990. That's a 37% Increase.

2. It's a staple in the asian community. With 54% of the population being of asian descent.

3. The poverty rate is a crazy-low 6.39%. Which is the leanest on this list.

4. Finally, the median home value sits around $850,000 and it's steadily increasing.

There is no doubt that Union City is poised to flourish over the next decade due to the amount of homebuyers that are pouring in from Fremont and San Jose. For all of these reasons, Union City could be the best place in the Bay Area to purchase a property.

Hayward

Is quite a bit different from the smaller community of Union City. Situated directly between Oakland and Fremont on the 880 freeway, Hayward has always been in a promising geographical location. However, due to it's lack of economical development, it's inhabitants choose to commute out of the city to work in places like San Jose and San Francisco. But, being the city that everyone commutes from isn't necessarily a bad thing. In fact, investing in a commute-focused city could be a great long-term investment strategy. Why did we put Hayward at the top of our Bay Area markets? Let's find out.1. The median home value is $630,000. Which is the lowest barrier to entry on this list.

2. Only 5.7% of residential buildings are two-to-four units. a.k.a. Huge opportunity.

3. It's a car-commuting mecca. So, demand for smaller units will keep rising.

4. Home of Cal-State East Bay, providing student-customers and stable employment.

Let's be honest, Hayward isn't the most luxurious or safe metropolis in the Bay Area, but it definitely carries great appeal for anyone looking to buy real estate here for a decent price. I mean, where else can you find properties for less than $650,000 in the immediate San Francisco Bay Area? Trust me, they are few and far between.

San Leandro

Is another East Bay city that is growing into a go-to suburb of Fremont and Oakland. With its great commutable location and bay-front land, San Leandro is a flourishing Real Estate opportunity. Similar to Hayward in low property value, at least for the bay, San Leandro is poised to gain more than 10% in value over the next 3 years. This is because of the low population, lack of economical gain and higher poverty rate. Now, that doesn't mean that the odds are stacked against this sleepy community. The thriving city-centers that surround San Leandro are still growing, even with the virus, and that is going to eventually result in higher property values in "the dro." Here are a few reasons it made it on our list of the top markets in the Bay: 1. Just like Hayward, the low barrier to entry makes this an avid contender for new investors.

2. Lower rents compared to neighboring markets. So, there is less rent-inflation.

3. 5 minutes to OAK International Airport, California's fourth largest airport.

4. Comprised of diverse neighborhoods, many investment strategies could apply.

With a lot of similarities to Hayward in property values, San Leandro sets itself apart with its inviting diversity and close proximity to the OAK airport. Unfortunately, San Leandro does have the highest poverty rate on this list, sitting at 9.9% according to NS. Which, in comparison to the rest of the nation, is still acceptably low. All aspects considered, San Leandro stands as a monumental opportunity in Bay Area real estate investment.

The Bottom Line: Some markets in the Bay Area may see large declines in value over the next few years due to a multitude of variables. I think that these three markets will appreciate faster than most of the hottest neighborhoods in the Silicon Valley.

What do you think?

Oakland has more small multifamily properties than the rest of Alameda County combined. In fact East Oakland has more small multifamly units available than all three of those cities you are promoting. 

WRT Oakland.... do you own a bulletproof vest?   Also, Oakland has some of the most stringent rent control in all of California.  The state as a whole now has rent control also, but it's much more lax. 

Oakland recently added "owner occupied duplexes and triplexes" to the units covered by rent control.  IMHO this might be a violation of Costa-Hawkins, but I'm not a lawyer.

This year, you are allowed a whopping 2.7% increase.  Yes, there are ways to get more, but you have to petition for it, supply documentation etc.