Silicon Valley’s tech boom has given rise to one of America’s biggest millionaire hot beds, with the world’s most successful companies providing some of the best paying jobs in the country. At the same time, this boom has also created the most expensive real estate market in the country. To understand just how insane Bay Area home prices have become, consider this – Palo Alto, a suburb about four miles north of Google’s headquarters in Mountain View, California, is considering building subsidized housing for families who earn between $150,000 and $250,000 annually. The low-end of that range is nearly three times the median American family income of $53,000! But in Silicon Valley, skyrocketing real estate prices have made it impossible for middle-income wage earners like teachers, firefighters, government employees and even doctors to live even remotely close to where they work. Since 2012, the median home price in San Francisco has risen +88% to around $1.25 million. It’s a similar situation in surrounding Bay Area towns, where it’s estimated that less than 20% of families can afford to buy a median priced home. In San Francisco, it stands at just 11%. Media outlets recently got wind of a billboard that seems to perfectly sum up how out-of-control the market is, advertising homes starting in the low-$1,000,000! Even rent is through the proverbial roof, averaging about $4,500 a month in San Francisco. There are loads of stories out there about city dwellers creating make-shift living spaces in the back of trucks, building rooftops and little-used closets. Earlier this month, a widely circulated story about a guy renting a plywood box parked in his friend’s living room for $400 a month prompted the city of San Francisco to issue a notice that living in “pods” was illegal. Interestingly there are recent signs that the real estate boom out West might be starting to ebb. Bay Area real estate broker Redfin say March housing prices actually fell -1.8%. They say the drop is due to residents being “fed up” with the high prices and crazy competition. That price drop hardly makes a dent though, when you factor in that San Francisco home prices skyrocketed over +20% in the last quarter of 2015. The crazy prices don’t stop at living spaces – commercial property values have also been part of the boom, with landlords charging upwards of $1,000 per square foot for office space. That’s in part been fueled by one of the lowest office-vacancy rates in the country, standing at just 5.9% the end of last year. Again though, there are signs that bubble is bruising a bit as venture capital funding is slowing and a wave of consolidation is sweeping through the tech sector. This has led to an increase in subleases that charge rents more than -15% below the regular leases. Some lesser-known tech companies have even decided to pack up and leave Silicon Valley altogether, opting for more affordable tech hubs like San Diego, Seattle and Austin. It cuts the companies’ overhead while also allowing them to attract talent, as a $150,000 annual salary goes a lot further in Texas than it does in San Francisco.

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