There are gov't policies that make it much easier to get money to purchase a home. 30 year mortgages were created by the gov't which locks in low payments. Mortgage tax deduction lowers the effective cost of a mortgage. Easier to get money to buy a home -> price of homes go up.

Normally when prices go up, supplier (homebuilders) have an incentive to produce more housing, countering the increase in price. However, many cities (SF is a great example) make it very hard to build new housing. Restriction on supply with increasing demand -> price of homes go up.

85% of SF bans apartment buildings. Projects take years to get approved. All of those costs get rolled into the final amount.