More homes top $1 million in Bay Area neighborhoods

The Bay Area creates more million-dollar homeowners than anywhere in the U.S., and San Jose is leading the charge.

Since October 2017, San Jose has seen a 14 percent increase in the number of homes valued at more than $1 million, according to a new report released Thursday by Trulia. The city went from 56 percent to 70 percent of its homes valued at more than $1 million dollars, the biggest percentage jump in the U.S.

San Francisco and Oakland metros also ranked high in the report. About 8 in 10 San Francisco homes and 3 in 10 Oakland homes hit the magic number.

The super-heated Bay Area real estate market continues to drive up personal wealth, at least on paper, in neighborhoods and bedroom communities once populated by blue-collar workers.

Trulia senior economist Cheryl Young said the skyrocketing Bay Area home prices have pushed buyers into previously overlooked neighborhoods. “People are starting to look further afield,” she said.

The median home value in the U.S. is $220,000, up nearly 8 percent during the last year. Just 3.6 percent of all U.S. homes are worth more than $1 million, Trulia said.

About 30 percent of California neighborhoods carry a million-dollar designation.

In San Jose, Evergreen, North Valley, Santa Teresa and Blossom Valley saw home values rise by at least 15 percent to break the $1 million valuations.

San Jose agent Sandy Jamison said prices were driven by the strong economy and housing shortage. But, she added, the market has cooled considerably. “Sellers need to price it right in order to sell the property,” she said. “They shouldn’t expect those high numbers.”

The Trulia valuations are estimates and can be higher or lower than the actual sales price, the company said.

The study also found Fremont added more million-dollar neighborhoods than any other city in the U.S. The East Bay city had 11 new communities where median home values broke $1 million during the last 12 months.

Fremont, home to the Tesla factory and several solar and electronics companies, saw these neighborhoods climb into seven-figure valuations: Ardenwood, Blacow, Cabrillo, Canyon Heights, Glenmoor, Grimmer, Irvington, Niles, Northgate, Parkmont and Sundale, according to Trulia.

Timothy Crofton, a real estate agent with two decades experience in Fremont, said the working class neighborhoods have been popular with immigrants coming to work in the tech industry. The influx of new immigrants and young families has improved the school system, he said.

When a neighborhood gets too pricey, he said, the adjacent community becomes popular. “It’s just a bridge from neighborhood to neighborhood,” he said.

“Fremont is a bedroom community,” Crofton said. “It was and always will be.”

Fremont agent Sunil Sethi said many of his clients work at Facebook, Apple and other tech firms on the Peninsula. Home prices in the East Bay, although expensive, are still a bargain compared to San Mateo and Santa Clara counties, he said.

Berkeley, San Mateo, Pleasant Hill and Redwood City also had multiple neighborhoods reach new, $1 million home value highs. And many cities tracked by Trulia have every neighborhood above the threshold, including Lafayette, Foster City, Menlo Park, Cupertino, Mountain View, Palo Alto and Sunnyvale.

Although Bay Area home sales have slowed in recent months, median sales prices have continued to climb year-over-year since 2012.

Despite higher household incomes in the Bay Area, record-setting home prices have made the region the least affordable in the country, according to the National Association of Home Builders. The San Francisco metro was the hardest major city to buy into, and San Jose was the fourth most difficult.

“If you go anywhere outside the Bay Area,” said Young, “you’ll feel like you’re getting a deal.”