The Cost to Own

Last weekend, I attended the wedding of my younger son's best friend, who for all intents and purposes, was like a third child to us. Andrew accompanied our family on many a vacation, and spent a good deal of time at our house, just as Tristan did at his. Those boys grew up together and are still close friends to this day (although Andrew grew taller, much to Tristan's chagrin).

The wedding was a stunning affair in St. Helena, and the weekend could not have been more lovely. Set against the picturesque hills and vineyards of Napa Valley, on a perfect, fall evening, Andrew and Leah's vows were the culmination of an 11-year relationship that reminded us all of how wonderful young love can be. Congratulations to the beautiful, and joyous couple; may your lives be filled with love and laughter.

A nurse, and a sales rep by day respectively, Leah and Andrew currently live in Austin, Texas where they intend to reside for the foreseeable future. Why aren't they returning to the East Bay where they are both from? It's too expensive to live here.

Alas, they're not wrong.

Based on historical data, the median price for a Piedmont home in the 1970s was $45,000, which had risen considerably from the 1960s, where the median price sat at $28,900. Today, Zillow puts the typical Piedmont home value at approximately $2.51 million as of August 2026. Redfin's median sales price figure for Piedmont was approximately $3 million for the same period, and Realtor.com calculated the price at $3.6 million, illustrating just how much the number varies depending on the period and methodology. That represents approximately a 55-fold increase in value since the 60s.

Much of that appreciation reflects:

• inflation
• land scarcity
• regional economic growth
• Silicon Valley wealth creation
• dramatically higher incomes at the upper end
• increased demand for Piedmont's schools and location
• decades of constrained housing construction
• the accumulation of housing equity
• more demand than supply

The real story is the relationship between these factors. Piedmont real estate in the 1970s was expensive, but it pales by comparison to today's values. In the 1970s, a family could buy a typical family home with a conventional salary, a manageable down payment, and a monthly mortgage that, although expensive (interest rates were 11%!), was tied to a dramatically lower purchase price.

It's important to note that the median income in Piedmont in the late 60s was only $16,533 but even so, the ratio of home to income was much more affordable. A home's intrinsic value represented 2-3 years of one's salary, not 10-15 years. Back then, Piedmont's community included, teachers, firemen, and working-class Americans, along with doctors, lawyers, and executives. For all those folks, homeownership was not only attainable, it's how they built equity and wealth over time.

Consequently, existing Homeowners may be sitting on millions of dollars in equity, while first-time Buyers are trying to enter the market using today's salaries and today's mortgage rates, putting them at a distinct disadvantage in competition. And while competition also existed in the 70s, inventory was much stronger as well, providing for many more opportunities and less upward pressure. In today's world, housing hasn't simply become more expensive; the entire financial ecosystem surrounding a house has changed dramatically (and not for the better).

Contrast yesteryear's wages to today, where the median income in Piedmont is above $250,000, but the cost to own is MUCH HIGHER making homeownership in the Bay Area increasingly unaffordable. In fact, homeownership is often the result of wealth that has ALREADY been created. In short, established wealth is now the prerequisite to owning a home.

Today's Homebuyer is often relying on stock compensation, investment portfolios, inherited wealth, parents who can help with down payments, and equity from their departing multimillion-dollar Bay Area properties, which dramatically skews who can pursue "the American dream" and who can't. In short, for many people, homeownership has become a much harder hill to climb, or put another way, we're back to the haves and have nots.

And yet, one thing hasn't changed much at all: people still want good homes in good neighborhoods for the same reasons they did 50 years ago. The schools, architecture, parks, proximity to San Francisco and Oakland, and sense of community remain remarkably durable sources of demand, which explains why our Piedmont marketplace continues to climb in the face of rising interest rates.

At the end of the day, people still need places to live, and they'd prefer to live here if they can do so.

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