Yes, nobody in the real estate business has learned a thing from the previous crash. The banks, the builders, and the owners all still fantasize that they can demand similar market prices as they did 10 years ago, when everything was inflated well beyond its actual value.
It’s probably been inflated for over 30 years. The house my dad built in 1982 was a 3 bed/2.5 bath (2,500 sq.ft.) and he paid about $60,000. It was considered expensive back then.