The big assumption of next 20 years house price
average will go up 5%/year could be totally wrong.
This is could be just stock market. Extream example here
could be.
In the last 20 years average Nazdaq is up 5%(just as
example, I don't know). If you buy Nazdaq index and hold for 20 years, your money could be XXX. What if I bought Nazdaq in 1999-2000 when Nazdaq at around 5000.
Do you think how many years that I have to wait to get Nazdaq to 5000 again, probably another 7 years or more.
In the stock market you get opportunity to average down.
House is expsensive, I don't think people(99%) would do be able to do average down.
Doing investment in house in this area is not good idea (I am not talking about buy to live for yourself).
It might be OK to do RE investiment in other states, especially those area you can generate positive cash flow from rental. Worst case you still can get house paid off after 15 or 30 years(depends on your morgage term). Your assumption is totally based up house price going up. What if it goes down another 10%, or another 20% ? or stay flat in the next 5 years. What about a serious earthquake in BayArea gives a big dent to the economic here ?