There’s a persistent myth gaining traction in some circles: that the Bay Area’s housing crisis is subsiding, that home prices are stabilizing, and that the worst is behind us. But the numbers—and the lived experiences of millions—tell a different story.
Far from declining, housing prices in the San Francisco metropolitan area are rising sharply, especially at the top. According to new Zillow data reported by the San Francisco Chronicle, the average price of a top-tier home in the region climbed nearly 4% over the last year, reaching $1.91 million in February 2025. In contrast, the value of low-tier homes—many of them condos—barely moved, hovering around $700,000.
This growing gap between the top and bottom of the market reflects deepening inequality in housing access. The housing crisis hasn’t abated—it’s simply evolved. Wealthier buyers, often flush with stock market gains and cash reserves, are able to navigate the high-interest rate environment with large down payments or all-cash offers. Meanwhile, working- and middle-class families are increasingly priced out or choosing to leave altogether.
As real estate broker Sandy Jamison put it to the Chronicle, “The luxury home inventory is especially tight, even by Bay Area standards,” making the high-end market more competitive. Meanwhile, “many ‘low-tier’ homes are likely condominiums, whose market is generally much weaker.”
This is not just a Bay Area problem. The Chronicle reports similar trends in Los Angeles, San Jose, and San Diego, where high-end property values are outpacing those at the bottom and middle of the market. It’s the same crisis, just distributed unevenly.
So what’s driving this disparity?
High mortgage rates have chilled the broader market, especially for first-time buyers. “The people who are considering whether they should rent or buy are people who are starting out,” said Nigel Hughes, a senior market analyst at CoStar. “Who’s going to be brave enough to make an investment on a house where there’s all of this going on in the economy?”
Meanwhile, wealthier residents are flocking to real estate as a safer investment amid stock market volatility. As East Bay broker Hans Struzyna noted, “When people are seeing tremendous volatility in their stock portfolio or their 401k… they start to think, what’s the next best asset?”
For lower-income Californians, there is no “next best asset.” There’s barely a roof.
This divergence is not merely a function of personal finances. It’s the result of decades of underbuilding, restrictive zoning, and legal roadblocks that have strangled California’s housing supply. The consequences are dire: an estimated 2.5 million homes short of demand, nearly 200,000 unhoused residents, and over 80% of low-income households rent-burdened—spending more than 30% of their income on rent.
Against this bleak backdrop, California legislators recently introduced a promising bipartisan legislative package to address systemic barriers to housing construction. The “Fast Track Housing” package, unveiled earlier this month, includes 20 bills aimed at streamlining the development process and accelerating housing production across the state.
“In California, it’s harder to get homes built than nearly anywhere else,” said Assemblymember Matt Haney, chair of the Assembly Housing Committee. “Every step of the process has unnecessary delays, roadblocks, and bureaucratic hurdles. We have to move with a level of urgency that is unprecedented.”
One of the most sweeping proposals is AB 609, introduced by Assemblymember Buffy Wicks, which would exempt infill housing projects that already meet local environmental and zoning standards from the California Environmental Quality Act (CEQA) review. Wicks called it “the biggest sweeping reform on CEQA in the 50 years it’s been in effect.”
This move addresses a long-standing issue: CEQA, while originally intended as an environmental protection law, has too often been misused to block much-needed housing—particularly in wealthier communities looking to preserve exclusivity under the guise of environmental concern.
Senator Tim Grayson, a licensed general contractor with three decades of experience, captured the problem succinctly: “There’s nothing that drives up a project quite like uncertainty. Time is money. The longer it takes, the more expensive it gets. We need to find more ways to get homes built faster—and more affordably.”
The Fast Track Housing package represents a shift in tone and strategy. It recognizes that California’s housing crisis is not merely a function of market forces but the product of institutional gridlock—of “rules designed for stagnation,” as Haney put it. And it suggests that both parties, at least for now, agree that unlocking housing supply is an economic and moral imperative.
Critics of housing reform frequently raise concerns about local control. But local control without local responsibility has resulted in some of the worst housing outcomes in the nation. Many cities have consistently failed to meet their housing goals, leaving the state to deal with the consequences: rising homelessness, entrenched poverty, and generational inequality.
The urgency is real. As lower- and middle-income residents flee urban cores for more affordable inland cities like Fresno and Bakersfield—where, tellingly, low-tier housing prices are growing faster than high-tier prices—we are witnessing a quiet form of economic segregation.
As Chronicle reporter Christian Leonard writes, “Lower- and middle-income residents are likely to continue leaving the region for more affordable areas.” If trends continue, the Bay Area risks becoming a city for the ultra-wealthy, serviced by those forced to commute long distances—or simply locked out altogether.
We can’t wait this out. The crisis won’t resolve itself. And tinkering at the margins won’t suffice.
We need to take action to build deeply affordable housing, remove artificial constraints on infill development, and reimagine a housing system that prioritizes people over process. CEQA reform is just the start. We need expanded affordable housing, stronger tenant protections, and new investment in communities most harmed by displacement.
The housing crisis isn’t going away. But if Sacramento finally moves swiftly and decisively, we may begin to turn the tide.
There’s my nonsense housing article for today. Seems like these aren’t posted as early as other articles these days. In any case, I saw the source of this yesterday, in The Chronicle. Let’s break down the second paragraph:
“According to new Zillow data reported by the San Francisco Chronicle, the average price of a top-tier home in the region climbed nearly 4% over the last year, reaching $1.91 million in February 2025. In contrast, the value of low-tier homes—many of them condos—barely moved, hovering around $700,000.”
(So, I’d suggest buying a “bottom-tier home”, especially since they’re surprisingly-affordable. By the way, you cannot determine the value of existing housing stock solely based upon current sales, since it’s possible that more “higher-end” houses are being sold – driving up the average.)
(In any case, I’d ask why the Bay Area is continuing to pursue H-1B visas, etc. There was also a recent article outlining the salaries of these non-resident, primarily technology workers.)
https://www.sfchronicle.com/projects/2025/bay-area-h1b-visa-tracker/
What impact do you suppose THAT (the H-1B visa program) has on housing prices? (Note that technology companies are one of the primary funders of YIMBY groups.)
Main housing article drops at 9 am daily