Ironically you've demonstrated why low interest rates might be a primary culprit. (FYI the cost of the building it not hugely relevant, it's the land.) Imagi

Ironically you've demonstrated why low interest rates might be a primary culprit. (FYI the cost of the building it not hugely relevant, it's the land.) Imagine that you can afford some kind of monthly payment for your mortgage - as interest rates go down, the larger the loan you can afford i.e. 'leverage'. The longer people believe that interest rates will 'stay low', the more confidence they have in taking large loans. The longer the process goes on for, the longer people believe we are in a 'new normal' and feel confident in their purchases. Ironically, the big swings in prices in real estate are a function of leverage (i.e. low interest rates): if an economic crash hits, fear causes a crash and then upswing commensurate with the leverage in the system. NIMBYISM does not cause an increase in demand. Only 'more potential buyers' with 'more income' and 'more leverage' can do that. Since cities are not rapidly expanding in size with NIMBYISM, and wages are not radically increasing, it's likely a function of continuing high leverage.