Maybe you could think of it like a PE on a growth stock - people expect the house to go up due to inflation of cost of goods as well as all the money that was p

Maybe you could think of it like a PE on a growth stock - people expect the house to go up due to inflation of cost of goods as well as all the money that was printed - they are willing to take a punt on the house value in the future, similar to many stocks. There's also sunk cost in the effort of finding a house you want and reluctance to keep looking.