One of the things about California that seems craziest to me is that people pay so very much for housing. Sure, people make more, but they then spend WAAAY more on everything, especially housing. I don't remember where I saw it unfortunately, but here in SD something like 53% of households spend more than 30% of their income on housing. I'm not surprised, though. We spend just about 30%, and we're in about the cheapest place we could find. We also make pretty close to the median income, which means half of households in SD earn less than us. If we're just about where we should be, but living in one of the cheapest places around, it's not surprising the half of San Diegoans earning less than us can't find housing that consumes less than 30% of their income.
I really wish this info was broken up geographically, but here's an article showing how housing prices have changed, adjusted for inflation, since 1890. The depression shows up nicely, as does the post WWII boom, but the interesting thing is, the long-term average hasn't changed much. Like I said, it'd be nice to see this broken down regionally, but the take-home message is this: home prices are pretty well set by income. The bad part of that is housing prices are still 15-20% too high.