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Improving Demand Still Contending with
Ramifications of New Supply in the Core
Construction pressures are locationally bounded. The most active span for multifamily construction in Oakland in more than two decades has arrived at a turbulent time. As the Bay Area's generally least vacant rental market historically, the 18,800 units that have opened here since 2018 were well received in 2019, 2020 and 2021 before demand diminished in 2022 and 2023. Slower hiring after 2021 contributed to higher vacancy in not only Class A rentals, which compete the most with new supply, but also with Class B and C apartments as well. These pressures are largely confined to the cities of Oakland and Berkeley, however, with operations improving elsewhere in the market. Vacancy in Concord-Martinez and northern Contra Costa County fell 30 basis points in the first quarter.