Another factor that is commonly overlooked which keeps prices from falling: the price only needs to be affordable to buyers. When supply is very low, you only

Another factor that is commonly overlooked which keeps prices from falling: the price only needs to be affordable to buyers. When supply is very low, you only need a small group of buyers being able to afford sustained high prices. It doesn't matter if the general public can't afford a 400K home. Only buyers need to be able to afford it, and you'll always have a group that can.