This pretty much seems reasonable. Housing demand should probably depend mostly on the amount of wealth (maybe this should be income?) in the area. It seems possible that wealth in the valley is growing at 20%.
Re:Charts That Scare Wall Street
by mintyfresh on Friday October 28, 2016 @12:19PM
(#12817626)
20% growth would mean the wealth in the area would double every 3.46 years.
This morning, it was announced that the US GDP grew at an annual rate of 2.9% last quarter, accompanied by the WSJ headline "US Economy Roars Back" [1].
20% growth is nowhere near "reasonable".
[1] http://www.wsj.com/articles/u-s-economy-grew-2-9-in-third-qu...
GDP is a measure of income, not wealth. It makes sense that wealth matters more for house prices than income, because it's a ~ one time purchase.
Inflation in the Bay Area is around 20% YoY, based on price increases in the housing market.