How long will this trend continue? With communicative technology ever-improving, won't we reach a certain breakpoint? A person from San Francisco that had a home could sell it and move to my Metro Detroit neighborhood and buy a much larger home, with a beautiful yard and space to boot, and then still pocket possibly a few hundred thousand dollars. The high paying, high tech jobs may not be here yet, but isn't it a matter of time before business owners in the "high rent districts" recognize the inherent value in places like Detroit?
Detroit gets so much bad press though. I'm not sure a lot of people want to buy cheap property there and risk not having a police force that is able to protect them from crime. People don't usually rush to buy property in the ghetto areas of big cities and Detroit's national press gives off the impression that the whole city is a blighted, dying ghetto with an inadequate police force. I think you'll sooner see telecommuters moving into moderate sized cities near quiet farming communities than you'll see them moving to the rust belt, and within the Midwest why not move to places like Indiana or Ohio that don't have the same reputation of being corrupt and run down? I mean no offense to Michigan, I've got family who lives in the area and the state has some real beauty, but I don't think most of America hears anything good about the place. I think part of the issue is entrepreneurs want to be close to the source of their money, or to future potential financiers. It's probably easier to find a venture capitalist to fund your ideas when you're in a financial hub and it's probably much easier to network in general. A face to face meeting simply gives off a better impression than e-mail, phone, or even Skype, and you're more likely to rub elbows with influential people if you live in the same geographical area as them.
But how many people and corporations would be willing to take that risk? Sure, it would be a lot cheaper, but Detroit simply doesn't have the resources and infrastructure to support the same things as San Francisco. Unless there was a huge crash in silicon valley that affected companies there the way the automobile industry collapse affected Detroit, there's little incentive to leave. In their eyes, don't fix what ain't broke.
Kansas City is on the verge of a tech boom due to Google Fiber and cheap costs of living. Chatanooga, TN is starting to bloom as well; you can get affordable gigabit internet, buy a house 5 minutes from downtown for under $100K and are close enough to high tech areas for work while you slave on your game/apps/site/idea. Why in the hell, with options like that, are you wasting your start up capital on $5000/month rents for apartments in San Fran?