As home values in much of the East Bay and South Bay have surged by over 50% in the past five years, values in parts of San Francisco and Oakland have fallen precipitously.
In interviews with this news organization, real estate agents throughout the Bay Area said the trends were propelled by three primary dynamics: COVID-driven demand for larger living spaces, safety and quality of life concerns in the cities, and high interest rates.
Data from Zillow shows that between the first three months of 2020 and 2025, home values in southern San Jose increased by around 55%, while cities in the East Bay, like Castro Valley and San Ramon, saw up to 63% increases in home values.
In downtown San Francisco and Oakland, meanwhile, home values decreased by between 12% and 21%.
Shalini Reddy Sadda, a San Francisco-based real estate agent at City Real Estate, said the impact of COVID on remote work was the single biggest driver of the exodus from San Francisco.
“People wanted that extra office space, and because it was COVID, people were very cautious and they wanted outdoor space as well,” she said.
Mikayla Weissman, an East Bay-based real estate agent at Compass Real Estate, agreed.
“I think the market that we saw from 2020 through 2022 was astronomical,” she said. “It was just so extreme and active and competitive. And it was because the East Bay can offer more space, an extra room, a backyard, sunlight, and a lot of other things.”
The median sales price of single-family homes in the Bay Area was $1.4 million in May, according to the California Association of Realtors. The median home price was $924,950 in Contra Costa County, $1.4 million in Alameda County, $1.8 million in San Francisco, and $2.2 million in both San Mateo and Santa Clara counties.
Some real estate agents said that after the spike in demand for East Bay housing during the pandemic, interest has cooled. David Gunderman, an Oakland-based agent at The Gunderman Group, said many of his clients were beginning to look away from the allures of an East Bay lifestyle and back toward big cities.
“People don’t have as much time or energy or patience for maintaining a big yard as they used to,” he said. “People are enjoying density again. I think they would value more walkability to a cafe or a coffee shop than they would having a yard that they may never use.”
Helen Chong, the founder of San Jose-based Haylen Real Estate, said higher crime rates in San Francisco and Oakland was the reason many of her clients cited for moving from those cities to the South Bay.
“Drug use, homelessness, and just violence in general have become really widespread,” she said; and in contrast to that, “Silicon Valley has a very family-friendly environment in terms of safety.”
Chong also stressed the importance of school quality to families, a factor the East Bay-based Weissman said loomed large for many of her clients as well.
“Schools are really important, because they’re families, and places like Castro Valley, Albany, El Cerrito are all known for having really good school districts,” she said. “That’s still the goal of buyers right now. They want space, they want good schools, they want that classic single-family home lifestyle.”
Weissman said she’s noticed another phenomenon recently: grandparents moving from San Francisco and elsewhere to be closer to their kids in the East Bay. Eleven of the 15 groups who attended one of her open houses in Kensington, she said, were in that exact situation.
“All their kids didn’t ever make it into San Francisco or Marin, so they’ve set roots in Berkeley and Oakland,” she said. “And now it’s the grandparents wanting to also find somewhere where they feel safe and feel like it’s nice and pretty to be around.”
While San Francisco- and Oakland-based real estate agents said the high-crime perception of their cities contributed to falling home values, some agents said they’d started seeing these perceptions shift more recently.
Sadda, in particular, credited the election of new mayor Daniel Lurie with breathing new life into the city.
“I really see him on a day-to-day basis, talking to the locals, and I think that in itself is making a big impact,” she said.
Oakland, meanwhile, “has definitely had a branding problem around crime and safety and some of the services like schools have been perceived to not be as robust as people would like,” Gunderman said.
But for Gunderman, things are trending up. “The Oakland city government is stabilizing under new leadership,” he said.
Real estate agents also said that economic uncertainty and high interest rates were depressing the housing market across the board. Chong said recent tariffs, in particular, had discouraged many of her clients from making the leap into the market.
“I think there’s so much uncertainty in the political environment,” she said. “They’re saying, ‘I don’t want to react to it anymore, because I don’t know what’s going to be new next week.’ This is very rare.”
Gunderman, meanwhile, noted the influence of high interest rates. Rates on 30-year, fixed-rate mortgages have risen above 6% after dropping below 3% during the heart of the pandemic.
“It’s created a shallower buyer pool that is understandably critical because they are paying a lot of money to buy these houses,” he said.
Several other agents agreed that high interest rates were a key reason behind the housing market’s current lethargy. But in many recent cases, Weissman said, sellers could not hold on for lower rates any longer.
“It’s just been too long,” she said. “So all those people are giving up and saying ‘OK, fine, I’m just going to do the move.’”
Gunderman noted several other “microtrends” he has seen — people, for instance, trending away from fire-prone areas.
“They’re also simultaneously being called back to work, so commute times they thought might never occur again are back in their consciousness,” he said. “You see that having an impact on the San Francisco market.”
Ramesh Rao, a South Bay-based agent at Coldwell Banker Real Estate, pointed to the artificial intelligence boom as having had a unique effect on the South Bay housing market.
“Millionaires are being minted on a daily basis,” he said, “and the first thing they want to do is buy a home in the very well-known, desirable areas, like Saratoga, Cupertino, Los Altos and Los Altos Hills.”
This trend, he said, is keeping markets hot in the South Bay.
As for the future, agents agreed that when interest rates lower, they expect to see a spike in demand on the part of both buyers and sellers and a reinvigoration of the housing market.
“The moment it comes down below 5%,” Rao said, “the buyers will take over. And we’ll see another growth spurt.”