I think many, many young couples with good incomes and some savings are opting out of CA at this point. I just met a girl (well, I guess we are women at almost 40yrs old now) the other day at my kids' little school (public). She is a lung doctor and also raised in beautiful San Diego. Husband also has a fantastic job. No shortage of income or cash, but they felt they were priced out of CA – and left. As cyphire says – the prices for small 3 bedrooms in places like DelMar, where people like this would want to live, are not realistic. It is not a matter of not being able to afford 1.5m for some people … it is the fact that WHAT YOU GET FOR 1.5M IS NOT WORTH IT. So I am of the camp that there are very few 1st time buyers out there with any hope of buying in at even $400k, and of the few that do have cash, they will find what is available at that price unappealing.
Folks that think it's bad here, try living in the Bay Area. Here you get to pay a lot for something that at least looks decent. There, you pay a lot for something that looks like a 19 year old hole in the wall. Of course there is a shortage of land in Bay Area as opposed to here.
