To estimate the typical home value of a region, Zillow uses what it calls the Zillow Home Value Index — a number that takes into account multiple data sources, including seasonal variations and the values of homes nearby.
According to this index, San Francisco’s average home values sank slightly from $1.46 million to a slightly less eye-popping $1.42 million, making it the only major Bay Area city where home values decreased in the pandemic’s first 12 months.
Estimated home values for most of the Bay’s other cities increased by more than 8.8%, the national average for urban areas. Some places, like San Jose and Napa, increased by much more than that — the cities’ property values soared by 14% and 13.6%, respectively.
A zoomed-in look at these areas shows several ZIP codes that outperformed their cities’ averages. Three ZIP codes in San Jose saw home values shoot up by more than 16%, while ZIP code 94559, a suburban part of Napa, went up by almost 20%.
San Francisco, on the other hand, had just two ZIP codes with positive home value growth — 94112 in the Outer Mission/Excelsior area grew by just under 2%, while 94122 in the Sunset District stayed almost flat, with 0.7% growth.
In 94123, a ZIP code representing the Marina and Cow Hollow, estimated home values fell by nearly 10%, to $2.35 million. And they dropped from $1.66 million to $1.45 million — a 12% decrease — in 94104, a ZIP code encompassing a tiny slice of the Financial District.
The Zillow report found that across the U.S., urban areas’ property value growth was mostly on par with suburban areas; urban regions grew by 8.8%, suburban by 8.7%.
Growth was even steeper in California, where the median home value shot up by 11% over the past year to an all-time-high of $635,000 despite soaring unemployment rates. Increased demand from affluent residents and years of low supply in the housing market drove prices up, according to the Public Policy Institute of California.
The Bay Area deviated from state and national trends. The nine-county region’s urban ZIP codes saw home prices increase on average by just 4.7%, while its suburban ZIP codes’ home values shot up by 9.3%. The sluggish pace of urban home prices is driven almost entirely by San Francisco: After factoring the city out, other urban ZIP codes in the Bay Area grew by 8.5%, nearly on par with the national average.
Additionally, across the entire Bay Area, our analysis found that home values in less-expensive ZIP codes increased at greater rates than pricier ones. However, this trend reversed in rural areas: Affordable rural ZIP codes saw home values increase at a lower rate than in wealthier areas.
ZIP code 95046 in San Martin, for instance, saw median home values increase by nearly 22%, from $1.08 million to $1.3 million; ZIP code 94515 in Calistoga, a wealthy town in Napa County, had property values increase from $888,000 to $1.07 million.
Meanwhile, the comparably more affordable ZIP code 94571 in Rio Vista saw home values increase just 8.4%, from $385,000 to $417000. ZIP code 95421 in Cazadero actually decreased in estimated home value, from $566,000 to $563,000.
It’s possible that wealthy San Franciscans leaving the city saw ZIP codes in affluent rural regions as attractive from a quality-of-life perspective, with homes that still cost less on average than San Francisco’s.
Our analysis adopted economist Jed Kolko’s definition of urban vs. suburban ZIP codes, which relies on household density. All of San Francisco’s ZIP codes qualify as urban, while most other major Bay Area cities have a mix of urban and suburban ZIP codes.
The table below shows the change in real estate values for all cities in the Bay Area for which Zillow has estimates.