According to the WSJ (2/17/09, B4, article by Pui-Wing Tam), 42% of households in Silicon Valley earned more than $100,000/year. "Meanwhile, the percentage of households earning less than $35,000 a year reached 20%, up from 19% in 2002."
I hate these kinds of statistics--the term, "households," is so vague. It could be one person earning $101,000/year, or two adults earning $51,000/year. Still, it looks like the recession may not affect Silicon Valley as harshly as other locations. I don't see housing prices dropping severely (not any more than they already have, I mean). Despite the recent condo construction, Santa Clara County doesn't have an oversupply of housing.
Also, the new developers don't seem to have thought things through. Most of the new condos are in downtown San Jose, which won't attract families. If they were trying to cater mainly to singles and young adults, they made a mistake. Most singles won't be able to pay a high price for housing because of two reasons: one, young singles have only one income; and two, they are not in their peak earning years and probably have student loan debt.