The under-a-million-dollar home appears to be on a path to extinction in the Bay Area.
A decade ago, nearly 70% of single-family homes in the five-county Bay Area sold for under $1 million. As of 2024, that figure had fallen to just 26%, according to data from the California Association of Realtors.
Here’s how much the percentage of homes sold under a million dollars has changed in the five-county core Bay Area:
— Alameda: 84% in 2014 to 30% in 2024
— Contra Costa: 84% in 2014 to 58% in 2024
— San Francisco: 45% in 2014 to 10% in 2024
— San Mateo: 47% in 2014 to 3.7% in 2024
— Santa Clara: 61% in 2014 to 5.6% in 2024
Meanwhile, the number of homes sold above $2 million in the region has grown from 6.9% in 2014 to 29.6%.
The numbers are even more eye-popping in Silicon Valley. In San Mateo and Santa Clara counties, 49% of homes sold in 2024 went for over $2 million, versus 12.3% in 2014.
The Bay Area has 33 “two-million-dollar” cities, meaning that the typical home value tops $2 million. Topping the list are Atherton, with typical homes valued at $7.7 million, followed by Los Altos Hills ($5.9 million), Hillsborough ($5.3 million) and Los Altos ($4.5 million).
The lack of homes under $1 million has made it more difficult for first-time buyers to get a foothold in the market. In Oakland, the buyer of a median-priced starter home — defined as a property whose price falls between the 5th and 35th percentile — must earn $194,004. In San Francisco, it’s $285,426. And in San Jose, the buyer of a median-priced starter home must earn an astounding $299,414 — more than anywhere else in the country.
That leaves the Bay Area’s middle class without a clear pathway to ownership. Many people are leaving for areas with lower cost of living where they can afford to buy.
Several of the Bay Area’s top employers — even at high-paying tech companies — have cited the region’s high housing costs as a reason for why they are looking to expand elsewhere, this news organization recently reported.
Many first-time buyers are instead looking at condos and townhouses as a more affordable alternative to a single-family home. As of January, the median condo in the greater nine-county Bay Area sold for $770,000, versus $1.12 million for a single-family home — 46% less.