- Prices are determined by comparables. When home owners sell, and can push prices higher, it pushes all possible future prices for all properties nearby higher simultaneously.
- Corporate interests are buying up real estate, and especially rentals. (public and private equity purchases are 6x higher than they were a decade ago here). Higher rental prices encourage people to leave rentals faster, making people more desperate to buy, increasing their willingness to take on more debt.
- (in a few areas) construction is limited and not keeping up with growth. In most of Midwest US, construction outpaces growth, but since prices are determined by comparables, new construction in an area can be priced at top of the market, resetting those comparables higher too. Paradoxically, even though we do need new housing construction to have housing, our financial system is setup such that new housing construction generally raises all prices for all housing on average -- the "more supply" benefits don't really take effect for about 30 years, when they become normal mid-market units.
- In some areas, new Hotels entrants are escaping basic regulation by lying about who they are. (see AirBnB, Vrbo and similar hotel chains). This removes housing supply, and can't be market corrected by other competitive hotels (since they would have to follow basic hotel regulation, but AirBnB and Vrbo are allowed to break the law)
- Unlike in 2008, corporate interests are willing to just eat massive losses to prevent property prices from falling. And the federal government is willing to extend massive amount of lending to them to allow them to do this almost indefinitely. So even in places where there's a massive supply of empty units, those units aren't making it to the market at any reduced prices because it's too affordable to simply sit on them instead and hope they're eventually able to rent out again at ultra-high pricing. I suspect we'll never see a gentle market reset back to real-world-based numbers like we saw in 2008 for that reason.
Any one of those problems would raise property prices for everyone. But we're dealing with all of them, simultaneously.
Something like this https://ny1.com/nyc/all-boroughs/news/2024/01/05/hedge-fund-... would be a gentle start to attempt to address the above problems, but it remains to be seen if they actually get this through.