There are a couple of possibilities:
* There is a supply of decent middle-income housing inhabited largely by Mexicans and less so by other groups.
* Those people have money and are living in expensive San Francisco houses that have a decent amount of space for a family.
* They don't have much money, and are crammed into small houses or are living in bad neighborhoods (as defined by high crime or other objective measurements).
* Your numbers are off and there aren't 'tons of families' from that group.
Which is it?
I thought you said you had lived in SF?
Actually I do see a few houses in the $1 million range on that page, but none of them seem to have yards. With no backyard and no reasonable parks in the neighbourhood, where would your children play?