After years of sky-high home prices that have made the Bay Area synonymous with unaffordability, home values spiked to even higher levels in the past two years, thanks to the coronavirus pandemic.
Overall, from the beginning of 2020 through April 2022, the median home value in the San Francisco-Oakland-Hayward metro area, a region encompassing five Bay Area counties including San Francisco, Alameda and San Mateo, increased from $1.1 million to $1.49 million, about 32%, according to Zillow data. That includes a 20% increase in the past year alone. In the San Jose metropolitan area, home values increased by 39% since the beginning of 2020, with a 25% increase in the past year.
The map above shows which ZIP codes in the region saw the largest increases over the past year. ZIP code 94587 in Union City in Alameda County saw the fastest growth at 31%. Only one ZIP code, 94060 in Pescadero in San Mateo County, had negative price growth, with home prices decreasing by 7%.
Two years of COVID-19 drove up the cost of real estate nationwide; the median home value in the U.S. surged from about $250,000 to nearly $350,000 — a 38% increase.
Though home values grew dramatically in the Bay Area, the jump was slightly smaller than the U.S. overall. That’s probably because of the city’s already-steep home values, combined with a pandemic-era trend of local home-seekers moving into the outer Bay Area and beyond for more space and better value — a phenomenon economists have called “the doughnut effect.”
Bay Area home prices have climbed steadily since about 2012, after dipping several years after the 2007-09 recession. But the past two years have driven unusually high costs even for the especially pricey metro area, propelled by a nationwide home inventory shortage that’s even more acute in the Bay Area. In a February 2022 report, the National Association of Realtors found that for every 1,206 households earning about the median income in San Francisco and San Jose, only one home in their price bracket was on the market.
The combination of low inventory, plus the increased desirability of homeownership in a pandemic in which people are spending more time at home, has driven frenzied bidding wars in the Bay Area housing market — but it’s also driven many families, even some wealthier ones, out of the city and into nearby regions such as Wine Country and Lake Tahoe, fueling bidding wars there too and drawing the ire of longtime residents.
The San Francisco and San Jose metro area’s home value jumps of 20% and 25%, respectively, in the past year is a major increase over such a short time frame. But it’s in line with the U.S. overall increase of 21%, and smaller than several other major metropolitan areas — such as Austin, Texas, where home values increased by a staggering 38%.
This trend is evident within and around the Bay Area as well. While home values in San Francisco grew by only 13%, in neighboring towns such as Pleasanton and San Ramon, home values shot up by 29% and 30%, respectively.
“People like location,” Ronnie Escalante, a Realtor in San Francisco, previously told The Chronicle. “People also like quality of life. These are nice neighborhoods where … you’re in the middle of everything.”
Increase in average home value by city in the San Francisco area over the past year
There are some signs that price acceleration is slowing a bit, in part because of mortgage rates increasing as the Federal Reserve tries to tackle rising inflation. But demand is so high now and inventory so low, these factors are unlikely to cause prices to decrease, according to experts.
Housing value data comes from one of Zillow’s home value indexes. The value shown is based on single-family homes, condos and co-ops whose home value is between the 35th and 65th percentiles in a market. The values are adjusted based on short-term seasonal fluctuations. The data is updated on the third Thursday of every month with the previous month’s values.
Zillow’s home value index data represents an estimate of the typical home value in a given geography, such as a state or ZIP code. The data on this page is meant to compare regions and illustrate trends over time — it is not necessarily an indication of any individual home’s value.