Yes of course demand is influenced by all these things. But it’s driven by people moving to a location and wanting to buy homes.

The market clearing price is also driven by these things.

But let’s be clear: the primary driver of sky-high prices in the Bay Area is (1) people moving here, getting well-paying tech jobs, and wanting to buy housing, and (2) not nearly enough new construction to meet that demand.

If the fed continues on it’s current course, I guess we’ll find out over the next few years huh?

I wish -- but I suspect we won't, sadly, because many factors are at play, including the move to remote work for many, many tech companies. If we see both higher interest rates and dramatic drops in demand, then everyone will be able to spin their own story out of it.

Eh, the demand shifted to more rural areas with the remote work shift, so nation wide the trend didn’t change much.

See the Case-Schiller index [https://fred.stlouisfed.org/series/CSUSHPINSA]

Changes in interest rates will be quite visible there, unless millions of people get ‘snapped’ and their houses remain intact anyway.

That graph doesn’t really prove anything, though, because interest rates and housing prices are already correlated through economic growth: fed raises rates when economies are hot, and lowers them when they’re not. Also house prices go up when economies are hot, and don’t as much when they’re not.

The most recent lull in prices correlated with a lull in rates, which kind of goes against your overall point of higher rates pushing prices down because the cost of capital increases? But maybe I’m misunderstanding your point.

I addressed it in a parallel thread - there is lag and the overall markets are pretty illiquid in real estate which makes it worse.