Housing prices in Silicon Valley are likely in a big bubble. In fact, many long-time residents are unable to continue living there because of housing affordability. The Silicon Valley housing bubble is will likely crash during the next recession: sending home values plummeting, and creating another mortgage crisis. A potential housing crash could help many afford to live in Silicon Valley though.
Silicon Valley housing prices are due for a crash. A housing official in the area was forced to resign because she can no afford to live in the area. San Jose is also the first city to have a $1 million average price. This restricts buyers to only the wealthy. Prices have risen faster than wages.
Housing prices will not crash soon because the units are still very full in Silicon Valley. When a great deal of people move out and they lose a good tax base, then the prices will decline. People are making money left and right in the real estate sector there, so they won't reduce prices while there is good demand.
As of 2016, housing prices in Silicone Valley are experiencing a sort of slow down, so media and magazines are covering this as though the bubble has burst. It's still extremely expensive to buy in the area, and others are comparing this to SF and the housing market there, which didn't really have crash, but sort of stretched. It's still possible there will be a "crash" but many folks think it's already happened.