Help me understand the Bay Area/ SF

[Tyler D.]

I work in SF, and have rented as I am wary of the seemingly unsustainable prices. I would like to buy a house (to owner-occupy) if it makes sense, but I can't get a clear picture of whether or not it makes sense to buy here. Often, I hear one of two extremes:

The Pro-Bay Area extreme:

"The bay area has always been expensive. I could barely afford to buy my house when I bought it, and I couldn't afford to buy it now. Get in while you can."  

Problem: Extreme appreciation can't continue into purpetuity. Eventually, you'll hit a point where everyone is priced out. Seems a lot like 2000s era stock investors saying that the market can only go up.

The Anti-Bay Area extreme:

"$1.5m for a house? How can anyone afford to live there? I paid $100k for my house here in Ohio. There are homeless everywhere and poop on the streets. I don't care if I could get paid 2x the salary there, it's just too expensive."

Problem: Ignores factors such as high salaries that lead to higher prices. Brushes aside the career opportunities and massive amount of money in the area.

I'm looking for a more sober middle-ground, or perhaps a more convincing explanation for either of the extremes if they happen to be true. Personally, I would like to believe that home prices will continue to go up, but I haven't heard an argument convincing enough that I would bet $1.5million on it. Experienced bay area investors/ residents, let me know your thoughts on this complex topic!

[Account Closed]

growth in price is slowing and will slow more... yet hold value more or less, if you were here in 2008 you noticed the prices in sf and silicone valley held. Suburbs around Bay Area dropped quite a bit but not as much as the rest of the country... but then returned in 6 years. The area continues to hold great job prospects and famous colleges... and rich people around the world retire in places like Marin, Sonoma, Napa, Los Altos/peninsula, I would not bet on dramatic price drops nor dramatic increase.