A ZIP code in Oakland has emerged as one of the weakest housing markets in the country.
Previously, a two-bed condo overlooking Lake Merritt would have been snapped up almost immediately, or certainly sparked a bidding war.
Now, homes in the 94612 ZIP code are languishing on the market for months. Desperate sellers are having to cut listing prices by as much as $100,000 as the California city suffers with its reputation for crime.
A two-bedroom, two-bathroom 1,349-square-foot condo with a lake view was first listed for sale in June for $850,000, and has now dropped to $749,000 three months later.
A post-modern condo of a similar size in the area has also seen a $76,000 price drop since it was first listed back in May, down from $675,000 to $599,000.
Meanwhile another Lakeside home has also been on the market for four months, forcing the seller to slash its price by $74,000 from $689,000 to $615,000. Back in 2022, the two-bedroom, two-bathroom home sold for $750,000.
While American home price gains have begun to slow, property values are still higher than they were before the pandemic in most major US cities.
But in this Oakland ZIP code, home prices are down a huge 30 percent since 2020 — plummeting from $796,000 in January 2020 to $558,000 in August 2025, according to Zillow.
A two-bedroom, two-bathroom 1,349-square-foot condo with a lake view was first listed for sale in June for $850,000, and has now dropped to $749,000 three months later
The 94612 ZIP code straddles the Uptown and downtown neighborhoods of Oakland
The drop is the largest in the west among the 10,000 largest ZIP codes in the country.
However local experts say that this area is suffering from a series of specific issues, and it does not paint an accurate picture of Oakland’s market overall.
The neighborhood suffers from a reputation for empty storefronts and crime.
Stores in the area, which straddles both the downtown and Uptown neighborhoods, have closed in recent years, and office buildings have remained empty since the pandemic, with many workers relocating to the suburbs.
Many major hotels in the area have closed as tourists have been put off by the city’s reputation for homelessness and widespread drug use.
The Oakland Marriott City Center, the city’s largest hotel which opened in the 1980s, recently defaulted on a $100 million loan and is at risk of foreclosure.
But many locals believe that negative news coverage has painted the city in an unfair light.
‘I think that Oakland has been getting hit by a series of overly negative stories recently, just as San Francisco was hit by a tsunami of “doom-loop” stories in 2023,’ said Patrick Carlisle, chief market analyst in Northern California at Compass.
‘Oakland certainly has problems to resolve, but I’m confident that it will rebound as it always has in the past — as San Francisco is doing now.’
Oakland has developed a reputation for crime, homelessness and drug use
A post-modern condo in the area has seen a $76,000 price drop since it was first listed back in May, down from $675,000 to $599,000
A Lakeside condo selling for $615,000 has a monthly homeowners association charge of $1,500
Another major issue is that many of the properties in the ZIP code are condos, which are seeing significant fee increases and deterring would-be buyers.
The Lakeside condo selling for $615,000, for example, has a monthly homeowners association charge of $1,500.
‘This ZIP code is predominantly condos with very few single family homes and speaks more to the differential we are seeing in the single family versus condo market,’ said Lisa Cartolano, Compass Sales Manager in Oakland.
She said the condo market is significantly softer than the single family home market for various reasons.
Law changes passed in January now require special inspections and maintenance for condos in California, which has meant HOA fees have increased to cover the cost of repairs.
‘Insurance has been an issue across the region and HOAs are finding that they are having policies dropped and less coverage that is more expensive, which has had some impact on the ability to obtain lending,’ Cartolano told the Daily Mail.
There is also a hangover from the pandemic where buyers are looking for more outdoor space, which many condos in high-rise buildings in the area do not offer.
But Cartolano points out that other parts of the city are seeing very different market conditions.
Locals argue that different parts of the city are seeing varying housing market conditions
Lisa Cartolano, Compass Sales Manager in Oakland, said many homes in the ZIP code are condos which come with specific issues
‘We recently had a home listed by an agent in our office in Rockridge that had eight offers and went $1 million over the list price to an all cash buyer,’ she said, of an Oakland neighborhood closer to Berkeley.
There has always been a ‘historical dichotomy of pricing in Oakland,’ she added.
The market for luxury homes in premium locations is still quite strong, agreed Carlisle.
‘Across the Bay Area, affluent buyers have played an increasing role in markets fueled by soaring stock markets,’ he said.
‘The most affordable neighborhoods in Oakland are quite weak, as they depend to a large degree on interest rates, which have been high for most of the year. Less affluent buyers also have been hit harder by economic developments in 2025.’
Before the pandemic, homes in the 94612 ZIP code had a higher average value than properties in the city overall.
‘Before 2020, everything you touched turned to “sold,”‘ Leena Zeidan, a Realtor with Tuscana Properties, told the San Francisco Chronicle. ‘Now, you have to be strategic.’
However the struggling area may now present an opportunity for buyers, and locals are confident the city will rebound.
Oakland Mayor Barbara Lee has noted the city’s falling crime rates
‘Oakland has been getting hit by a series of overly negative stories recently,’ said Patrick Carlisle, chief market analyst in Northern California at Compass
Sellers may be willing to negotiate down their price further, or offer perks like mortgage buydowns.
‘If there is a significant decline in interest rates, buyer demand may well rebound strongly in the next year, Carlisle told the Daily Mail.
‘Oakland has many really attractive and appealing neighborhoods.’
During the tech boom of 2013 to 2019, Oakland was one of the hottest markets in the Bay Area and the country, as San Francisco buyers looked for a more affordable place to live while still being close to the city, he said.
‘It may be that a similar dynamic gets underway as the new AI start-up boom continues to accelerate in San Francisco.’
Oakland was recently named by US News and World Report rankings as the second most dangerous city in the country.
It was also targeted by President Donald Trump, who said that despite falling crime rates the city was ‘so far gone.’
According to the City of Oakland, it has a crime rate of nearly 136 per one thousand residents. Yet, the Oakland Police Department announced a 28 percent drop in crime for the first six months of 2025.
‘Our work is far from done,’ Oakland Mayor Barbara Lee said in a press conference.
‘We’re going to keep building on this progress with the same comprehensive approach that got us here.’