While SD is somewhat expensive, housing is still relatively cheaper than in LA and SF/Silicon Valley. Combined with the low rates, $800k home isn’t too bad with monthly payments for a couple with $200k or > income.

The only question is the downpayment which apparently there are enough people who have 20% or more. (ie, move-up, retirees, asians, etc)

Having said that, I believe the current market is pretty expensive for new homebuyers, younger couples. Home prices are still high which means many of them don’t have 20% for a downpayment. Either they go FHA or get money from family.