Residential real estate valuations haven't been based on the house itself for a while. Prices are based on:

1) the house itself (this generally depreciates)

2) land (this generally appreciates)

3) a retirement account with great tax benefits (this value can fluctuate based on local, state, and federal laws)

4) a ticket into a good school district (this value will fluctuate based on the the performance of local schools)

5) a ticket to partake in a thriving local economy (this value will fluctuate with the local economy, and has recently been shaken up by the rise of remote work)

Any speculation on real estate prices and whether or not we're in a bubble has to take these things into account.