Much of the pricing has to do with record low interest rates. The majority of home buyers are taking out a mortgage. Low interest rates makes buying a home more affordable for more people. This increases demand and prices.
IF interest rates were to rise and drive mortgage interest back to 4 or 5 or 6%, there would be far fewer buyers for $500,000 homes. Prices would drop.
I have no idea if interest rates will rise in the near future. However, interest rates can not drop much lower as the 10 year US treasury is today at 1.4%
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