I looked and saw million dollar houses as far as an hour's drive away from SV.

You mentioned Gilroy, the price situation (800k, 4M, 1M, 1M, 600k are the first 5 results) doesn't even look much better than in SF proper:

http://www.zillow.com/gilroy-ca/

Moreover, they don't really have condos in Gilroy.

See, it's this kind of negativity that gets people depressed about housing.

Detached house (needs work) $359k https://www.redfin.com/CA/Gilroy/7270-Alexander-St-95020/hom...

Condo in Morgan Hill @ $446k: https://www.redfin.com/CA/Morgan-Hill/112-La-Crosse-Dr-95037...

Detached 3/2 SFH @ $500k https://www.redfin.com/CA/Gilroy/374-Walnut-Ln-95020/home/10...

Nice townhouse @ $495k: https://www.redfin.com/CA/GILROY/7664-GENNARO-WAY-9502/home/...

I'm from Pittsburgh, Pennsylvania, and the negativity is pretty warranted.

$250k gets you a two-story house with an actual YARD there.

Pittsburgh's tech scene is great now, too: Carnegie Mellon (CMU), Google Pittsburgh, Uber (self-driving car lab), Oculus Research, Duolingo, and a plethora of other startups. There's even seed investors here now! Even Paul Graham, a Pittsburgh native, is getting involved again.

I mention this to someone here, and 9 times out of 10 the reaction is along the lines of "Pittsburgh?! Why would you EVER want to live there?" Oftentimes, the person who cannot conceive the possibility of living a happy life outside of Silicon Valley's bubble either has an inherited house that ballooned in value, or they're still renting at age 35.

You have to play the Bay Area real estate game - which is itself a gamble - but always begins with buying less than you eventually want. This is what gets frustrating talking RE with folks, especially younger ones -- of COURSE you can't buy Barbie's American Dream House in one of the most competitive real estate markets in the world, you're 30 and don't have rich parents.

I'm a huge fan of getting out of Silicon Valley. Cashing in on BigCo salary for a few years and then buying a house in TX/PA/wherever in cash is a totally valid game plan. I think it's hilarious that our industry essentially invented modern telecommuting yet uses it so rarely.

As an aside, $250k may get you a nice house in PA, but the salaries are correspondingly lower. If you can't get paid substantially more in the Bay Area there's really no good reason to be/stay/move here since everything's so expensive.

"of COURSE you can't buy Barbie's American Dream House in one of the most competitive real estate markets in the world"

It's not even that though, $1M now gets you what's called a "fixer-upper" in SF -- a euphemism which actually means a house with broken gas lines that you literally risk your life occupying.

It's also impossible to save money here for a future house in a cheaper city when the median rent is $4000/month.

We're talking in circles now. Originally I said a person HAS to leave the "cool" areas of the Bay (SF proper being one of them) if they're looking to get ahead in the housing market. I don't think that point's been disproven here.