In the past, our memory did not need to be long. We only needed to think back to the past few years to make decisions about what we were going to plant, where our tribe was going to move, etc. Now that short memory is a problem. We don’t notice when things move incrementally, we see something move, and if it stays there for awhile, we reset our baseline to that new level and forget that it was ever at a different level. Sure, we can look back and note that it was once at a different level, but we can’t wrap our minds around the idea that it could ever go back to that level.
I’d say that where the readers of this site differ from the “common” in common sense is that we don’t use common sense to make our decisions related to housing. If we used the common sense, we’d be buying up houses so we didn’t get locked out of the market.
We are using logic and not common sense (just because a bunch of people believe something doesn’t mean it’s true) to override our instinct of thinking that the new baseline of housing prices is set at about $500,000.