One of the points I was trying to make is that those statements are fallacies not backed up by income statistics or availability of housing inventory. Although I will agree with you that Irvine is a more desirable place to live (otherwise I would move to Minnetonka), demand is measured in dollars, and Minnetonka has the same amount of dollars available to purchase housing as Irvine does. There is not so many fewer homes available in Irvine than Minnetonka to justify a median home price that is more than double.
IMO, it’s perceived demand that is sometimes more important that actual demand. It’s artificial. It’s easier to say “Orange County will always be in high demand” compared with “Minnetonka will always be in high demand”. The perceived level of always-high demand creates an impression (illusion!) that “prices will never go down”. When you have THAT in your mind, you decrease the perception of risk, and you inflate the prices.
Perversely, the widespread assumption that prices never go down, is one the reasons that prices went up so far, and then went down!!
