Low Inventory Continues To Affect Benicia Home Prices
We simply are not building enough single family and multifamily houses in California to meet the ever-growing population. This fact is complicated by the dynamics of the job market (like unemployment rates and the lack of new and existing business start ups or expansions, respectively), concerns over water storage, anxiety over rising mortgage rates, and the looming fear of shadow inventory left over from speculators snatching up the wreckage of the housing collapse a few years ago.
One cannot look at California and not narrow the focus to the San Francisco Bay Area. After all, we are the home of the Silicon Valley, and some of the hottest real estate markets in the nation, not the least of which are cities like Oakland and Vallejo that seem to be growing in equity by leaps and bounds, but each with their own unique challenges. Oakland and Vallejo seem to be going the way that Brooklyn and Queens did a decade ago, as hordes of Manhattanites flooded to the boroughs to find price relief. Today you will find folks from San Francisco and the Peninsula who are headed in droves to places like Oakland (just across the bridge) and Vallejo (a 45-minute ferry ride away) to buy homes and secure their piece of the American Dream.
This leaves Benicia in a unique situation, in this author’s opinion. Geographically, Benicia has no direct connections to mass transit like the ferry and Bart, but is centered in a perfect spot for freeway travel to both San Francisco and Sacramento. As you may already know, Benicia is all but built out. Only the remaining buildable lots within the city limits are available to add any housing. We do have a large piece of land, commonly known as the Northern Gateway Project, that is designated commercial/industrial, that developers have been trying to carve out a small piece for housing, to no avail. Even if they succeed in securing some residential units within the boundaries of the project, it would not add much. So where does that leave us here in Benicia? In the short run, it means continued inventory shortage for both properties for sale and for rent. It means equity should continue to grow as buyers will have to buy existing homes and improve or modernize them if they want to stay in a community with low crime and great schools. It means rental rates will continue to rise—thus bringing in investors with cash looking to finally be able to consistently cash flow rental units in the area—and as a result put additional pressure on sales in a market that already has very tight inventory.
Truly, Benicia is coming to a crossroads. This little city will have to try and balance affordability and growth with pressures on infrastructure. We will need to continue to try and create a business-friendly environment while keeping the feel of a small-town community. Capitalizing on public private projects, such as the Downtown Benicia Alliance working with the City to light the trees on First Street, or the City of Benicia allowing Genentech to operate a private ferry for their employees to get to and from work in South San Francisco, is just the kind of out of the box thinking that will be key to keeping our town relevant in the greater Bay Area market. We must also allow for rental expansion while being mindful of the impact on parking, local parks and school population. Finally, we will have to do it during one of the most politically divisive times in American history.
I live and work in this small town, and I will do my part to help steer our community’s future in the right direction. I would encourage those reading this article to do what they can, too. Start by shopping local, and then take the next step and volunteer for a local cause that appeals to you. Finally, you can engage with your elected officials and voice your concerns or share your vision for the future. It will be this kind of constant care that will propel Benicia into the next decade with positive and carefully thought-out growth.
Eric Hoglund is a licensed Real Estate Broker, California BRE Lic.# 01420325, Estey Real Estate & Property Management. 216 First Street, Benicia, 707.745.0924, esteyrealestate.com