Supply and demand. I think of demand as people looking to live in homes, not investors. If that was the case, demand should have dropped off a cliff after covid when they closed the borders. Our countries have negative birth rates. Immigration is the only source of new people. So you must have come to the conclusion at this point that the demand is purely investment driven via speculation. Now see a problem with just building more houses? They will just keep driving speculation until it all collapses leaving us with many many homes that will be wayyyy too cheap. And it will collapse, investors are purely just trading with themselves at this point as less and less people are participating in the market.
People moving around inside of a country is also a source of demand.
The price of condos in San Francisco dropped 10% with COVID-19. The prices in the Tahoe area are up about 20 - 30% over the past 12 months.
The demand moved to single family homes, because people wanted a yard, when they were locked down at home, with few things open.
Now that California and San Francisco is opening back up, the real estate demand is coming back, as are the prices. Yes, speculation and investment is part of the story. But also a lot of people made a lot of money in the stock merket over the past 12 months, and are looking to upgrade their housing.
