> It's a death spiral waiting to happen.

Probably not.

> Companies will move away from areas where their employees can't get hosting.

And if that happens in even a small degree, housing prices will drop, relieving the problem. It's only a problem if their is a sharply threshold where below which no one moves out, but just above which lots of companies do. That's not entirely implausible, but it's not all that probable.

> Not many have to move before the rest start to follow

That right there is the highly speculative part; if it's true, you have an out of control positive feedback loop, but otherwise it's a self-controlling negative feedback loop.

They have been saying that for years, and instead the opposite has happened. Most IT work could be done remotely, yet the vast majority of companies want staff on site. Almost every job I have had has involved distributed teams yet I am still expected to be in an office most of the time.

Has that ever panned out in practice? I mean, has a city economy in the US or somewhere else in the world ever popped because of too high housing prices?

It might be about to!

The USA has never had housing priced at such a high number of hours of work before.

We’ve always gotten this high and then housing would crash, the jobs would leave causing housing to fall, not the other way around.