Depends what is driving the housing appreciation. You can end up like Toronto & Vancouver where it keeps on going up anyway despite local incomes being far far away from those purchase prices, for a decade+
Yea, even if the local working population can’t afford them, the bay area can still be viewed as a hot spot to be causing housing to go up because they represent scarce investments/stores-of-value. Pressure could then push salaries higher into a positive feedback loop.
I think there's some truth to this, but the big story is simpler.
Prices have doubled in the past 5 years. Because of Prop 13, if you've been an owner through this, you just stay where you are.
Then the whole question becomes making sure things don't change. I think it's just a bunch of lucky owners who bought here 20-30 years ago with no intention or ability to sell, and not much interest in building new stuff.
As far as stores of value, housing is a pretty bad one. It falls apart, is heavily taxed, and is relatively illiquid. I think you'd do a lot better with stocks, or bars of gold.
Another feedback loop in action: SV & SF unaffordability pushes out service workers and causes the area to become a prime location for the deployment of service work automation technology, which may result in better chances for the startups in this field starting out here.
It is still unclear how economical this sort of automation will be in other parts of the world though. If it does turn out big, Silicon Valley will have a first shot at it.
I think people dramatically overstate the case for automation.
It may be that certain jobs get automated. But look at what Tesla is going through; they're using more people, not less, and basically admitted they screwed up trying to automate so much assembly work from day 1.
On the other hand, the electorate here (SF) seems to want to push minimum wages to $20/hr, so maybe you'll end up right.
This might only apply to white collar jobs in tech. People in the service industries and public servants don't receive the same sort of rising pay bumps that engineers and managers do.