I think you've got cause and effect wrong. What mostly inflates property values is the simple fact that lots of people want to live in an area. Or put it this

I think you've got cause and effect wrong. What mostly inflates property values is the simple fact that lots of people want to live in an area. Or put it this way: the reason people want to live in the Bay Area is not because of the amazing luxury condos. Sure, it's possible to build too many luxury condos and depress prices in that market segment, while not building enough of something else, but we certainly don't have that problem now.