> Berkeley has pleasant single family homes in a great school district around the $1MM mark. You can absolutely do that on $200k/year.
Let's say you make $200k/year and manage to put together a $300k down payment and get a $700k mortgage at 3.8%. Here is the breakdown of your annual spending (using 2018 numbers):
$18,500 to 401K
$35,930 in federal income tax
$10,593 in FICA (Social security and medicare)
$13,724 in California income tax
Take home after tax + retirement savings: $121,253
Also, remember that the rules have changed and only $10,000 in state, local, and property tax is deductible against federal income.
Remaining payments:
$39,140 in mortgage payments
$10,500 in property tax
$1,000 in homeowners insurance
$10,000 in car ownership costs (gas, maintenance, insurance, financing or depreciation)
$4,000 in utilities (gas, electricity, water, trash, internet)
$1,000 for phone
That leaves you with $55,613 of "real" annual take home, or $4,634 per month, without counting the cost of food, entertainment, other debt servicing, etc. Certainly not poverty wages, and many people get by with far less, but you'll also spend 2+ hours per day commuting and have a significant fraction of your net worth tied up in a house in an earthquake-prone area.