That seems like a very inefficient mechanism even if it holds true. The supply and demand should grow over time in an absolute sense. It brings to mind stack ranking's flaws of needlessly discarding talent and discouraging cooperation.
As for salaries the point of Silicon Valley as a selling point is to try to pay for quality - a fixed housing SV would still be more expensive than generic office in a generic town or outsourcing to cheaper still.
As for salaries the point of Silicon Valley as a selling point is to try to pay for quality - a fixed housing SV would still be more expensive than generic office in a generic town or outsourcing to cheaper still.