Vagrant and Google App Engine are not syncing files
Finally found the answer!
In the latest version of google app engine, there is a new parameter you can pass to dev_appserver.py.
using dev_appserver.py --use_mtime_file_watcher=True works!
Although the change takes 1-2 seconds to detect, but it still works!
I am currently using Vagrant to spin up a VM to run GAE's dev_appserver in the Virtual Machine.
The sync folder works and I can see all the files.
But, after I run the dev appserver, changes to python files by the host machine are not dynamically updated. 
To see updates to my python files, I have to relaunch dev appserver in my Virtual Machine.
Also, I have grunt tasks that watch html/css files. These also do not sync properly when updated by editors outside the Virtual Machine.
I suspect that it's something to do with the way Vagrant syncs files changed on the host machine.
Has anyone found a solution to this problem?