Indeed, and this is getting to the point that the parent and I are making. The same system which ideologically mandates maximum employment, is the same one maintaining the artificially inflated housing prices.
For instance, as a hypothetical, if you make $70k post-tax as a developer in SF, or $15k working part time at Mcdonalds in Flint, once your rent reaches about $5,000/month, you may actually be better off in Flint career-wise. But in fact, the median household income in SF is only $88k/year (pre-tax), which means that there are probably people already living in SF who aren't far off being better off moving to Flint for career reasons (not necessarily for the other reasons listed).
If developers in SF become too optimistic then those homes become a drag on the economy, and SF soon loses the career advantage it currently has, still leading to equilibrium eventually.
> tons of factors that affect rents more in the short term.
I felt I was quite explicit that finding equilibrium takes time. I am not sure why you are focusing on short term movements in price.
> You might as well argue that rents in SF are rising because they are trying to reach equilibrium with the rents in rural villages in Mali
In some ways that is true. China's rags to riches story happened in large part due to costs in the US rising to the point where it became cheaper to move (some) operations over there. Reaching equilibrium at the international scale is more difficult due to many artificial barriers found along the way, however. There is really nothing stopping an American citizen living in SF from moving to Flint.