Does it make sense to buy a home in the bay area now?

It\'s not my primary home but for `investment\' purpose.
I\'ve looked at (online :-) a few houses (single family/town house/condo) between 500K to 1M (palo alto/fremont/mountain view and another place santa cruz). For almost all of them, the cash flow is negative (even
with 30% down payment). It seems that the only reason to buy a home in
this area is to expect appreciation of the home in the future. But what do
you think the chance for the home (in this area) to increase value in the next few years?
How much it could appreciate? How long will the appreciation offset the cost? How risky it will be if the housing market performs badly in a year
or two? or is it just a very bad idea to buy home in this area now?
I am grateful for any answers and/or comments or suggestions of better
questions to ask if these questions are nonsense. Any pointers to the
information on the real estate market in this area would be helpful.
Anyone can recommend any good books on real estate investment? Many thanks
for your help.