I don't know that they are. A while back someone did a calc on Twitter where they argued for a median 2 bedroom house purchased with a median mortgage before the pandemic, and a family having a baby and move into a median 3 bedroom house purchased with a median mortgage after the pandemic. That extra bedroom? doubles your mortgage. I don't care how emotional your purchase right now. We're well outside the bounds of "but I want it."
The volume is so low that we’re not out of bounds of I want it and bad financial decisions be dammed I have 2-4 years left to produce babies. A lot of tech bros in our area can come up with 200-300 down and a mortgage and as long as both people work they can hold down the 7-10k house payment too. The volumes were taking about are like 20 houses a week so 1000 annually in greater Seattle. Add that to people being dead set for one hood and you would be lucky to average a house a week. Shortages create manias and manias aren’t rational.
Most don’t, 2 days or multiple offers and 100-200 over asking. The ones that sat for that long had something seriously wrong with them and were selling at a bad time of the year. Buyers get spooked if a listing goes pending and falls through or a bad remodel took out a load being wall or 2 and the yard is encroaching into the basement. 2 years ago I saw some go for 400-500 over asking so I guess it could be worse…