How to evaluate low cap rate + medium CoC in HCOL city duplex

[David Shank]

Hi, still trying to figure out how to evaluate a duplex in a high cost of living city. I am moving there soon and since I have the resources to buy I think I should look at a duplex I can also live in. Does it make sense with a cap rate of 1.x% and a CoC return of 5%? I could also use a small place i'm selling as part of a 1031 but not sure if that's worth the effort.

How do I interpret this in this type of market? Is this what a bubble looks like? Or is a very low cap rate what you go for in expensive cities with very low housing supply?