If you add enough housing+residents it will lower the values as the places become overcrowded metropolises less people want to live in.

But somewhere like the SF Bay Area has a loooooong way to go before it gets anywhere near that bad. Relative to most of the nation, it can get heaps worse in terms of crowding and QoL and still look exceptionally good. I don't see prices going down anytime soon, except if something like the homeless problem evolves into a continuous stream of violence and structure fires.