[mlinsey]

Those markets are very supply constrained. Despite a few recent piecemeal reforms, it's still very hard to build new housing (and it takes time to build more, with things like construction costs also becoming more expensive recently).

When supply is constrained, anything that increases demand - like return-to-office mandates finally bringing back workers who left for other states during the pandemic, or a boom in AI investment causing headcount and salary growth in a small sector that's very geographically concentrated in a single rent market - will greatly increase the price.