You know, most of this is less to do with people overbidding (which IS a factor, but not the main factor) and more to do with taxes and inflation. When you have 7-15% inflation rates, the cost of EVERYTHING skyrockets. Combine this with failed liberal tax policies, and you end up with crap like this because the seller ends up having to raise the price of their house to such an absurd extent, just to make a profit and not lose money over what they paid originally.

Combine this with morons actually paying double or triple the inflated market value, and you end up with the situation we're currently in. Most of the time, it's not even people actually buying the house to live, it's someone buying it as a rental property.

What a lot of people don't realize, is that banks will only loan you so much on a conventional loan. 500K+ houses are when they start getting more picky about what kind of house they'll loan that kind of money on. It's one of the many reasons it's hard to get a home loan in places like california, because it's hard to justify spending half a million dollars on a starter home regardless of location. It's just not likely to hold that kind of value in the long term, and when you're talking about a 30 year mortgage, that's a long time with a lot of variables.

But when you start talking about $1 Million+ homes? Well now you can't even get a loan from the bank. You're over the federal mortgage insurance allowance now, so you have to get a Jumbo loan with extra strings attached, and an INCREDIBLY in depth property analysis. Jumbo loan companies also often have MUCH stricter income requirements before they'll approve you. This isn't the type of loan anyone an get. You either have to be an established high net worth individual with stable income (assuming this is a personal use home), or you have to be buying the property as a rental in order to create income. And the latter is MUCH easier way to get approved on a Jumbo loan.

With all that in mind, most of these absurd housing sells where you have starter homes selling for the $800K+ range are almost entirely investors buying them up to rent them out, or sitting on their money because they need somewhere to park it after they pulled it out of the stock market (since we all see that crash coming too). And it's not just blackrock and vanguard like some seem to believe. In fact, they're a VERY tiny factor in this. They mostly go after commercial properties with only a small allocation towards Single Family Homes. I believe it's something like 95% of all Single Family Rentals are owned by individuals or small companies with a less than $1 Billion in capital investments (which sounds like a lot but when you're talking about real estate, it's not that much, especially with today's inflated prices).

The people doing this are simply wealthy individuals looking for a safe haven for their wealth during the coming crisis. Remember, there's more millionaires and billionaires in the US than any country on the planet. Not every single one of them has doctor evil money, in fact, most are simply around Trump tier in terms of wealth.

So yeah, it's crappy, really crappy in fact. And I honestly wish I or anyone else knew how to fix it. But the truth is, the only way to fix things at this point, is to let it all crash and start over. Which will probably be happening much sooner than we think in all honesty.

But on the bright side, once things crash and burn, combined with the new revised financial system we all theorize is coming, we'll probably see housing prices and rents at the same level they were in the 50s and 60s. Meaning if you live in a city or urban suburb, rent will be dirt cheap, and if you live in a housing division or rural setting, houses will also be selling for dirt cheap compared to today. That's of course assuming you're not going for some high end luxury apartment rental or (sub)urban mansion.