The perspective confuses me - isn't "having kids" the lifestyle that they want? If that is the priority, then other aspects of life must be flexible to accommodate.
* Have space for two children, presumably with separate bedrooms. Potentially even more than one bathroom in the apartment.
* Live in a nice, urban area.
* Bike 15 minutes to work.
They are able to afford this in Berlin, but probably would't be able to do the same in the US.
But from having bought a place in a high demand area recently, the thing is always "who are you competing with". When the average person with 2 kids and a dog are looking at the same houses in the same places as the other family with 2 kids and a dog, there will be differences, but overall it won't be too bad. The problem start when that family wants the exact same house/condo/whatever as the 2 highly paid software engineer with no kids.
Then you're screwed: you're competing on a different level. And there's starting to be a lot of people with high dual income and no kid. The US is generally a nation of divide between the haves and the have nots, but the cultural divide is making things waaaaay worse.
Even in SF, the housing is a lot larger than almost all of Europe. London is a disaster if you expect much if any space.
I'm not sure why that is. Being physically cut off from the world helped keep prices down for sure, but it doesn't explain why apartments are large relative to the number of bedrooms.
So we live in the city in a “small” (by modern American standards) condo and we’re super happy with it.