You're omitting a major component of the demand side: investors and speculators. If the market was just made up of the people who are looking to live in those homes, the market would be reasonable for those people. But we have a massive amount of investment funds looking for returns in an uncertain market, plus near zero interest rates for the near future. The number of investors who are buying houses they have no intention to live in is skyrocketing, either to rent out, to flip, or just to hold vacant in the hope values keep rising.
Investors and speculators don't live in houses, renters do. If there isn't renting demand, than it doesn't matter how much speculation there is, prices will fall. Blaming investors is directing the anger at the wrong place. Blame regulations and building restrictions that prevent housing supply being built where people want it.
Did you see the last part of parent post? Corporate speculators actually gain even more by taking the property off the market and letting the fallow property increase prices for the rest of their herd of properties.
One way to look at this is that a house on a piece of property can be treated as a fungible product for two different markets: it can be an investment vehicle for investors, or a place to live for homeowners.
As its value to one of those markets increases, buyers on that side suck supply out of the other market. You can get a sense of how much this is happening by looking at the vacancy rate: higher vacancy rates implies that houses are worth relatively more to investors than homeowners.
