I think there are two (very fair) criticisms in your post. One is that we're really talking about demand from people who can afford it. All the demand in the w

I think there are two (very fair) criticisms in your post. One is that we're really talking about demand from people who can afford it. All the demand in the world from people living on minimum wage won't drive house prices up so they aren't really "counted" in my analysis. There's not really a way to fix this issue with the data, but I'd argue that demand from reasonably rich people is still a good sign. Indeed, rich people are the most mobile and able to move away from a shitty place to live. The other is that the quality of the home matters (a lot). Which is completely true, but the cheap shitty homes in the bay area are still demanding these prices, so I'm not sure it really applies to the concrete situation being discussed even though it is an issue with my general argument. You could maybe try and find "comparable" homes in different places to try and account for that, but I have no doubt doing so would open you up to issues with bias (intentional or otherwise).