If they bought during the 90s crash, that house probably only costed $200k, and the mortgage is probably mostly paid off. They really can't sell either to upgrade given the way property taxes work in California (they pay tax on $200k, a new buyer would pay tax on $700k).

This is part of it. Prior to the great 'give everyone a mortgage' mess, a lot of people ended up buying their own home. In the Bay Area it was popular to convert stock options into property because you could live on your property but not on the stock certificates.

That said, it is much more common to exclude the net asset value of your primary residence in a 'net wealth' computation as it isn't nearly as useful to compare 'rich homeless people' as it is to compare people who are wealthy beyond simple home ownership.

It would be interesting to see the map where primary residences were excluded. (and the numbers, which is to say how much wealth outside of your home you need to qualify as the "rich".) And once you've done that, consider excluding $250K * kids as 'college money'[1]. Then you start to realize that "rich" means different things to different people.

[1] That assumes a lot of course, but still median 4 year tuition * kids might be useful too.