If people who would be buying high-end housing are forced to buy lower-end housing because the supply is tight, then prices will be forced to go up everywhere.
That's been happening in Bay Area for last 20 years, folks buying lower-end and demolishing and doing a rebuild. Palo Alto/Menlo Park are just more local and visible to me, but I assume it's the same elsewhere gradually. Coming from a softer market back around 2000 it was crazy to get outbid on a starter home and see someone demolish it right away.
