Having been a resident of both SD and bay area I can concur with both raptorduck and allan than things are different in the bay area than SD. I missed the RE boom in SD never imagining it might reach such stratospheric heights (by SD standards).Right when I moved to BA in 2001 it appeared that housing was much more expensive here than in SD (despite the 1998-2001 boom in Carmel valley) and I decided to buy a townhome in Mountain View which I had to sell when I moved back to SD in 2003 (barely broke even but now that same house is worth 30% more). I watched with incredulity the SD market (mainly Carmel valley) moving beyond the wildest imagination in 2005-06 timeframe. I moved back to BA last year (wisely deciding not to buy in SD for the last two years). While the boom seems to have run out of steam in SD it is still going gangbusters in the peninsula area (which includes Palo Alto, LAH etc). At least two of my friends are active in the buyer’s market and they have been outbid at least on 10 houses in the past year. One had to increase his budget from $1.2 to $1.5mil (since he was keen on staying within Palo Alto schools) and still keeps getting outbid evertime so far. The problem being there is no land left in these areas. The desirable outskirts of BA definitely (like Pleasanton, San Ramon etc) has seen price pressure in the last year but still is not bad since it is not rife with flipping and liar loans of the SoCal. Bottom line is despite all the market turmoil and economy stalling, prices here are at statospheric heights and there still seem to be plenty of buyers for the desirable locales ! And trust me I am no bubble denier !!
