Real estate in the Bay Area

Ryan Heshmati

June 14, 2024

The San Francisco Bay Area is known for many things: rich culture, technology giants, and, perhaps most notoriously, outrageous housing costs. In some parts of the Bay Area, the “million-dollar neighborhood” means undesirable. This stems from the frequency at which multi-million dollar median home values apply to many Bay Area communities. Unsurprisingly, highly sought-after communities like Menlo Park or Atherton command high prices, but seven-figure homes are the norm well outside the most affluent communities in the Bay.

Take East Palo Alto. The city has long suffered from a negative stigma and association with crime, but it has seen a significant shift. In January of 2024, Tim Fang of ABC News reported on a historic zero murders in East Palo Alto for 2023, which Fang notes is a major reversal from the 1990s when many referred to the city as the “murder capital” of the United States. Despite the past stigma, the community also boasts a seven-figure median home value, with Zillow estimating that the median home in the city is worth just over one million dollars.

Some are moving further and further out into exurbs in order to find more accessible housing. As a result, communities like Mountain House (in the East Bay) and Hollister (in the South Bay) have seen some development. Consequently, however, even the average Hollister home has seen a major run up in prices, with Zillow pegging it at over  $780,000. Allto live around fifty miles from downtown San Jose.

It can appear as though there is no refuge from high prices in the Bay Area, but some solutions are being looked toward. Dustin Gardiner of the San Francisco Chronicle points out there has been a major rise in the construction of ADUs (additional dwelling units), aiding in the creation of more housing units in the state of California. He notes, however, that Los Angeles, a city with similar cost of living challenges as the Bay Area, has seen more construction than up north. Beyond ADUs, Bay Area cities have made pushes for the creation of affordable housing, but that often ends up becoming a hot-button issue when specific projects are proposed as nearby residents often support NIMBY, not in my backyard, talking points.

There is a very real housing crisis in the Bay Area. The 2023 Silicon Valley Pain Index, produced by SJSU’s Human Rights Institute, calculated that 3.7 “... minimum-wage jobs [are] needed to cover the cost of a two-bedroom apartment in San José.” Whether the solution comes in the form of greater ADU construction (which could increase the supply of available rental units) or elsewhere, increasing the unattainability of housing in the Bay Area must be a focus moving forward.