Oakland zip code sees significant drop in property values

September 15, 2011 7:40:24 PM PDT
Foreclosures are on the rise across the country and in the Bay Area it's having a ripple effect and reducing the value of all the homes in the neighborhood. The latest foreclosure figures from RealtyTrac show there were 228,098 foreclosure filings nationwide last month -- that's one in every 570 households. In Oakland there is an example of how those figures are being felt especially hard in one neighborhood since they are far worse than the national statistic.

People in one Oakland neighborhood are having a rally in front of a foreclosed home that's marked up with graffiti. It is just one example of what this crisis has brought to this city.

"It brings the property values down for most people," said homeowner Yvonne Standford.

For 31 years, Stanford and her husband have lived on 55th Avenue which is a neighborhood that's now at the heart of the Oakland foreclosure crisis, identified in a new study by its zip code 94605.

"Actually, when they sold this house next door, it went way below market so that when you actually look at what your property value is, it's lower," said Standford.

According to a new study by the Alliance of Californians for Community Empowerment, by the end of 2012, the foreclosure crisis will cost Oakland homeowners $12 billion in value. Using forecasts from RealtyTrac, researchers determined from 2008 through 2012, 28,000 Oakland homes will have gone into foreclosure. Those homes drop in value by an average of 22 percent and others within an eighth of a mile, lose about 1 percent.

"I would think it would be more," said realtor Tracy Tilin McKendell.

McKendell said even neighborhoods and homeowners in Oakland's more affluent areas have suffered.

"So when you have foreclosures in general and people are abandoning properties, people are losing their homes, it brings down property values in that area, but it also helps to bring down the reputation of the whole city," said McKendell.

"We couldn't sell if we wanted to right now," said homeowner Jessica Hanserd.

Hanserd and her husband bought their home in zip code 94605 six years ago. Like everyone, their values have dropped during the recession, but now they're also surrounded by abandoned foreclosures and all the problems that often come with them like crime, drugs, squatters and blight.

"Many of these homes are modest. The one I live in is modest, but it wasn't unheard of for a house to be close to a half million dollars. It's nowhere near that now," said Hanserd.

The report estimates in the 94605 zip code alone, property value losses over a four-year period will exceed $700 million. That's after 4,800 foreclosures and that doesn't even take into account the cost to the city to mitigate and monitor foreclosed properties.