Many things driving housing pricing (nothing is monocausal!), but the main thing driving housing pricing in the locations where people constantly talk about housing pricing (SFBA, NYC, London, etc) are restrictions on building. That's basically it. Housing is a relatively poor investment vehicle compared to broad equity market indices; the only reason you'd want exposure as a "rich person" to it is for diversification, and for that you wouldn't really care to buy in overinflated markets with significant political risks.