I thought much the same thing. While it is high it is relative to global demand areas for houses (units and apartments are in a different category for a reason). Demand is high in SF and it isn't just because of the tech industry.

Some stats for Australia just to put another perspective into the mix.

Median house prices for Melbourne: http://www.reiv.com.au/Property-Research/Median-Prices

Median house price for Sydney: http://www.smh.com.au/business/the-economy/sydney-melbourne-...