The article author seems to be falling into the trap of only thinking the few huge cities of NY/LA are all there is to the USA. Why are home prices *in major cities* rapidly rising in cost? Because every 3rd rate blogger has aspirations to live in NY, which has limited supply.
If all the value is how much land you have, like the author claims, then people would just build a mansion in South Dakota.
It's not just major cities. This current housing mania is happening in smaller cities too. Like cities with only ~60k population and over two and a half hours away from any major city, in the Midwest.
Like where my parents live. There are several people they know that are selling there just because their homes have shot up so much the past year and are renting until the market cools down.
Our house isn't on the market, but the Zillow estimate has gone up 26% in the three years since we bought it, most of that in the past year, and we're not in a major city (far suburbs of one, though).
It's not people aspiring to have some vain dream. It's people looking for work and thats where they end up employed. I've read recently that since the recession, LA has added 5 jobs for every new unit of housing built. That is a recipe for tenement conditions and we are seeing that play out with how the working poor are currently living in these cities.
If all the value is how much land you have, like the author claims, then people would just build a mansion in South Dakota.