Housing functions like a reverse auction.  In the most HCOL areas, demand usually outstrips supply to such an extent that prices float up to a maximum ceiling (40-50% of avg income IIRC).  Above which people&#x27;s checks would bounce.  That&#x27;s NYC and SF.  The average person seems to simply pay &#x27;&#x27;as much as they can afford&#x27;&#x27; for housing.  In LCOL areas, it&#x27;s a function of land and materials prices, and in some super LCOL areas, where demand is flat or shrinking, prices can even fall below this.<p>As most&#x2F;all other areas of life experience deflation (iphones, education, food, travel, entertainment), HCOL residents will reallocate the savings into housing, pushing the ceiling and housing prices up.  Even despite attempts to increase supply, I think.  The best solution is to redesign the economy to enable and incentivize the relocation of young people throughout lower tier cities and rural areas in the US.