Basically I understand that there are not many houses for sale right now, so supply and demand would dictate high prices. However, wouldn’t the high prices attract more people to sell? Is everyone just holding their houses hoping prices go even higher?
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Any market is driven by supply and demand. More sellers drive price down, more buyers (or richer buyers) drive it up.
Current increase is driven in part by COVID: people stay home more, so they want nicer homes, and are willing to pay for them.
Supply side is complicated. On one side, it takes a long time to build new houses. On the other, actual supply are people willing to sell, and homeowners can change their mind and many are prone to hype.
Housing bubble is when people believe price of housing will continue rising way ahead of inflation, and start buying houses not to live in, but to resell later. Once some bad news break that belief, they all start selling those extra houses, and that can make the price crash.
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