You are correct, but it's understandable that people would be more emotionally invested in where they live, or would like to live, than in their stock portfolio

You are correct, but it's understandable that people would be more emotionally invested in where they live, or would like to live, than in their stock portfolio. You need to live somewhere, but you don't need to invest in the stock market. Also there's the wrinkle of the down payment, mortgage interest, property taxes, and maintenance. You aren't required to save up $200,000 down and borrow $800,000 to buy $1 million worth of stocks at once. The most I've ever had to save up was $3000 for a Vanguard fund and then you can dollar-cost average your investments after that. Returns on property in SF, on the other hand, will almost certainly require paying tens of thousands if not hundreds of thousands of dollars in interest, property taxes, and maintenance. This reduces the rate of return below that of stocks. However, you would have these costs elsewhere, just lower. I'd be really interested in an analysis of this problem of stocks vs. Bay Area real estate. This analysis would take into consideration the real rates of return, financing costs, rent lost while saving up a down payment, salary differentials, career risk due to job concentrations, mortgage default risk due to career risk, and loss risk due to lack of dollar-cost averaging. I suspect that living outside the Bay Area and investing in stocks would come out ahead up to a certain income level, which is attainable for only a small number of people (probably smaller than the number of people who think they can handle it and are discounting certain risks/being irrationally optimistic).