When people have to pay $4000/mo to rent a 3bedroom condo that the person next door pays $1300 on their mortgage (as is probably the case in many areas currently), won't companies eventually think that they can offer far more than just location to potential employees if they go elsewhere? I moved to the bay in 2004, and I was able to comfortably afford a few decent apartments in mountain view/sunnyvale. Those apartments have gone up by 200% in their price because of proximity to FB, Google and other firms.
Everything will continue to get more and more expensive as the cost of basic services goes up and up - eventually you'll start losing a lot of good creative people because nobody can afford to take an entry level job and work their way up. The bar for living "comfortably" in the bay area has been rising extremely fast, and those who have bought a home 20 years ago can live fine, but for young people especially it will be really difficult to catch up. I've had 7 or 8 friends in their 20s and 30s move to the Seattle area for purely economic reasons - a few to colorado and a few to Texas as well.
This is just a function of the markets. If people can't afford to move here, and vacancy increases, then housing prices will naturally drop. I've seen this happen more than a couple of times in the last 15 years. I have no doubt that rent prices will drop sometime in the next couple of years, because the rate of growth is unsustainable. One of my friends moved out of her 2br2ba apartment at Avalon Mission Bay because her rent was increased to 5100/month.
Everything will continue to get more and more expensive as the cost of basic services goes up and up - eventually you'll start losing a lot of good creative people because nobody can afford to take an entry level job and work their way up. The bar for living "comfortably" in the bay area has been rising extremely fast, and those who have bought a home 20 years ago can live fine, but for young people especially it will be really difficult to catch up. I've had 7 or 8 friends in their 20s and 30s move to the Seattle area for purely economic reasons - a few to colorado and a few to Texas as well.