Fair points, but you are comparing apples and oranges in many ways.
The Bay Area as a geographic location outside of industry-related trends is objectively considered much more desirable to a larger percentage of individuals. You have amazing weather mostly year round, great food, interesting culture, many activities to do in neighboring areas (Tahoe, wine country, etc.), much closer to asian countries, etc. I get that there are reasons to live in Michigan (I grew up in Chicago), but the above reasons combined with the limited buildable land strike me as not really being a competition at all.
I feel like there are many more reasons to want to live in the Bay Area, and those reasons coupled with the very real limitations on housing will keep positive pressure on prices for quite some time even if the tech industry were to eventually tank.
There was a book at the turn of the last century which had a quote along the lines of: "a gentleman would only ever consider living in a handful of American cities: Philadelphia, Baltimore, Cincinnati, New York..."
Philly, Baltimore, Cincinnati--all have pockets of great culture, but it's clear they're the legacy of a bygone generation. I'm not even sure San Francisco has the kind of old money that would keep alive the culture at the level of those cities.
Yeah, about the lack of water in California... (I get that a vast majority of it is used for agriculture and can be re-diverted for personal consumption, but that is going to cause some serious upheaval for the local populace/economies in CA.
That's the main worry I have in terms of long-term impact on home values. If the Bay Area turns into a complete desert, that would be problematic.
But that's really the big environmental disaster I can think of. If there was an earthquake that didn't level the entire Bay, I actually think that wouldn't do much other than cause people to say "oh, people are scared, I'll bet prices will be down, I should buy now!"
The Bay Area as a geographic location outside of industry-related trends is objectively considered much more desirable to a larger percentage of individuals. You have amazing weather mostly year round, great food, interesting culture, many activities to do in neighboring areas (Tahoe, wine country, etc.), much closer to asian countries, etc. I get that there are reasons to live in Michigan (I grew up in Chicago), but the above reasons combined with the limited buildable land strike me as not really being a competition at all.
I feel like there are many more reasons to want to live in the Bay Area, and those reasons coupled with the very real limitations on housing will keep positive pressure on prices for quite some time even if the tech industry were to eventually tank.