In heart of Silicon Valley, all but highest earners being priced out

Calif. housing prices surge
Calif. housing prices surge 02:12

PALO ALTO, Calif. -- Housing prices keep going up. 

Nationwide, the average home now lists for nearly a quarter million dollars. In California, it’s almost half a million.

And in the heart of Silicon Valley, all but the highest earners are being priced out.  

Jessica Clark has lived all her life in Palo Alto, but housing is now so expensive here even her kids know their family can’t afford it much longer.

“They have questions like ‘where am i gonna go to school next year,’ ‘if we have to move where are we going to go.’ And that’s questions a 6-year-old shouldn’t have to be asking,” Clark said. 

Palo Alto resident Jessica Clark with her young daughter.  CBS News

Clark and her husband, a medical therapist, pay 85 percent of their income on rent. 

A two bedroom apartment now averages $3,800 a month, which is well out of reach for Tara Hunt. Hunt is a kindergarten teacher who has taught in Palo Alto for 11 years. She is struggling to stay. 

“I’m actually considering moving back home,” she said. 

Kindergarten teacher Tara Hunt. CBS News

Hunt is in her mid-30s. 

“I know a lot of people who are doing it,” she said. “A lot of my friends are doing it. We don’t have any other options.”

With the median house price in Palo Alto now $2.5 million, nearly doubling in just the last four years, even the reasonably well-off feel shut out. Kate Downing is a Silicon Valley corporate attorney and her husband is a software engineer. Together, they are in the top 2 percent. 

Corporate lawyer Kate Downing. CBS News

But they can’t afford a house in Palo Alto. 

Downing resigned from Palo Alto’s Planning Commission, with a letter in which she lamented the city becoming a place where “young families have no hope of ever putting down roots.” She and her husband are moving 40 miles away, to buy a house.

But Downing said people shouldn’t feel sorry for her. 

“I think the people we should be sorry for are the people who can’t do that. What are you going to tell the people who are cooks, are cops, are teachers, are nurses, those are people you don’t want to move,” she said. “You can lose a lawyer, you can’t lose the people who are the backbone of your city.” 

Clark worries that her hometown is becoming so wealthy that soon only the extremely wealthy will call it home.  

“I see the end of the road and it’s a very hopeless feeling,” she said. 

  • John Blackstone
    John Blackstone

    From his base in San Francisco, CBS News correspondent John Blackstone covers breaking stories throughout the West. That often means he is on the scene of wildfires, earthquakes, floods, hurricanes and rumbling volcanoes. He also reports on the high-tech industry in Silicon Valley and on social and economic trends that frequently begin in the West.