Northern CA coastal markets entering bubble territory?

[Alessandra Verbena]

I thought I had seen it all until now. People scrambling in desperation to buy a home. Any "home" here on the Central Coast near San Jose and Silicon Valley. Even if it is a mobile home in a leased park, it is going over asking. I am referring to Santa Cruz proper, where any home is now $1M and above. Because of this, people are now moving on to offering cash for condos that are under a million with high HOAs and the offers come in well over asking, thereby pricing in future appreciation. I fully understand the issues with the Fed's monetary policy and the real concerns about inflation, but this market seems to be running on emotions instead of any type of sound financial decision making. I personally don't see this real estate price action as sustainable in the short term. Wages don't and aren't keeping up with the rapid pace of inflation and there are going to be fewer and fewer buyers with the salary to purchase, for example, a $1M condo with a $600 HOA. Because of this, I see the potential for a correction on the horizon. However, at the same time, I see that desirable areas surrounding large metro areas like San Francisco and Silicon Valley/San Jose are becoming fully "metropolized" thanks to remote work and the pandemic. And even with the emigration out of Silicon Valley, the prices in those markets seem to be holding steady. Is anyone else seeing what I am seeing? Open and curious as to anyone's thoughts on this.