I dunno. I don’t see how this can last. Even with your 25 years old cousin getting a windfall of $1.2M, that still can’t get him a 1600 sq-ft house in Cupertino, which is now going for around $1.8-2M. So, if he plow all $1.2M into the house, he would still need to get a $600-800k loan for a 1600 sq-ft house. You can get a much bigger house in Carmel Valley for $800k. So, even if you get a $200k windfall in SD, you’re still in a much better situation here. Not to mention the long term property tax difference. A $1.8M house in Cupertino would have yearly property tax of ~$21k and rising 2% each year, while the $800k house in Carmel Valley would have property tax of $9500. After 30 years, the Carmel Valley house would have a property tax of ~$17k while the Cupertino house would have property tax of $38k. At $38k/year in just property tax alone, I hope people in the bay save well and aren’t counting on SS.
I don’t know how high this will go, but definitely, right now, the bay area feel like 2006 in SD. I feel sorry for they young people who haven’t bought a house up there and aren’t lucky and hit an IPO lottery. For every LinkedIn, there are thousands of engineers who aren’t so lucky.
