1) You have to be careful with your definition of "local". The major reason that housing prices are so high is that many more people would like to be SF locals

1) You have to be careful with your definition of "local". The major reason that housing prices are so high is that many more people would like to be SF locals than currently can be. 2) Buying an investment home in SF is basically a bet that the authorities will continue to keep housing supply growing much slower than demand, causing prices to rise. Speculation just causes current prices to better match expected future prices.