2 Bay Area cities among top 20 ‘most valuable’ U.S. housing markets

California, the most populous state in the country, also has the most housing units of any other state. And those units are very expensive — only Hawaii has a higher average home value than California. 

“That combination of lots of homes and those homes being very expensive is the reason California’s housing market is the most valuable of any state by far,” a Zillow spokesperson said. 

And homeownership in the state is increasingly out of reach. A study published earlier this year by the UC Berkeley Terner Center for Housing Innovation found that homeownership in California is declining, especially among younger Californians, and that the gap between the percentage of Californians who own their home and the percentage of homeowners nationwide continues to grow — trends fueled by Californians’ inability to afford buying a home.

Orphe Divounguy, a Zillow senior economist, noted that nationwide, a surge of new construction helped drive growth in the nationwide housing market value. But in California, the number of housing units has only grown by 0.6%, compared to a 1.7% nationwide increase, which means new construction did not play as much of a role in California’s high housing market value, the Zillow spokesperson explained. 

And despite topping the most valuable list, California’s housing market value has decreased slightly since June 2022, when the nationwide housing market value peaked before a slight downturn later in the year. While the nationwide housing market value climbed 2.2% since then, California’s decreased by 3.3%. The only other state in the top five most valuable to see a decrease since last year is New York, whose housing market value decreased by 0.2%.

That decrease is also seen in the California metro areas that rank in the top 20 most valuable housing markets. Los Angeles, the second most valuable market in the country at $3.7 trillion, stayed essentially the same as June 2022, with an increase of just 0.1%. San Francisco, the third most valuable market in the country, saw its value, now $1.8 trillion, drop by 8.8% since the summer 2022 peak. That’s compared to New York, the most valuable housing market in the country at $4.2 trillion, which saw an increase of 4.2%.

Following San Francisco is No. 4 Boston at $1.3 trillion, a 3.4% increase from June 2022. The top four most valuable metros have remained largely unchanged for the last five years, the Zillow report said. But the fifth most expensive is a new entrant: Miami, valued just slightly below $1.3 trillion, an increase of 8.6% since June 2022.