I get emails every day of average homes selling for over $1 million back in my So Cal hometown. It's the best community in its county but that isn't saying much all things considered. The flip side to what you have written (and much of my business/nonprofit background is in housing/community development) is rents. The people who will be forced out of the homebuying market are forced into ever-escalating rents. I consult for a REIT right now. It's sick.