Bay Area Home Prices

Most of you probably saw this article about home prices today in the Merc. The whole home price situation in the Bay Area is clearly nuts, but it seems like it will continue. I know someone who just sold there home in Palo Alto for about $1.75M. And get this: The buyer gave them a 10-day close of escrow, with no contingencies, and all cash.

What's driving it? I figure a number of things: 1) tech is still a very profitable industry, 2) people continue to move here, especially from (very expensive) Hong Kong, 3) the weather, etc. is unbeatable in the world, and 4) for a variety of reasons there just isn't any more land to build on.

So it seems like prices will just keep trending up from here on out. Another indication that this theory is true is that buildings keep getting taller. It's all interrelated, it seems to me.