I can’t really read the numbers on your chart but I can see the lines and the divergence then re-convergence of the three tiers. A lot of discussion has gone into this and there are many reasons for buying a home other than size. Here on piggs people go on an on about the school district, proximity to jobs, community, crime stats, and so on. Carmel Valley is a prime example: people pay a premium to live there because they see it as having superior schools and community (even though IMO they pay too much for HOA’s and mello-roos). I’m sure in the bubble a lot of people moved up from low-end housing into mid or upper tier housing, using the money from the sale of their bubbly low-end house.
So to summarize my answer is: location location location.
