Not exactly. Most people require mortgages. The original owners might be underwater on their mortgage. People who can make it work generally aren't going to sell for a loss. The people who can't make it will be foreclosed, providing some affordable options but probably not enough.

So yes, prices will move with demand, but it won't be quite as simple due to the debt instruments involved. Essentially, prices will drop due to the lack of demand from a lack of affordable debt. Just my hunch.

So how do you feel about buying a used car right now? (i.e. buy one at this moment, after 40% YoY appreciation, because who knows what tomorrows price will be) And if it's not good advice for used cars, why is it good advice for a house? After all, there's a fixed supply of platinum for catalytic converters and they're not making any more of it!

My opinion is that the current housing surge is being driven by people who need more space for screaming children and home offices and are willing to pay whatever they need to for it. I know it's why my brother bought a house he thought was $250k overpriced - just to keep his wife happy during Covid.

These factors and the state of Covid WFH are, IMO, not permanent though. Time will tell. If we're never headed back to the office maybe these prices are here to stay.