You're mixing up two things. When a lot of new premium housing is built, you might indeed see the reported "average sales price" go up, since there are lots of sales of new fancy new houses.

But the price of older housing goes down. Because people who bought a new premium house, therefore did not buy an older house, which reduces demand for older houses.

There are lots of nice older (1940-1990) houses in SV that are good to live in. Before the tech boom they were perfect for middle class families: pleasant and affordable. They could be affordable again (and they're still pleasant) if the supply of premium housing were increased enough.