“IMO, real estate was and is overvalued relative to the rest of the economy.”
You are almost certainly right that it still is and it certainly has been in recent years. A few years ago some on FR were referring to spending five or six years gross income on a house as normal. It takes a lot of willful blindness to think that could be normal. I remember when the rule for most people was that a house should cost no more than two years annual income and that was based on a one income family. For a married couple to spend even two years income for both on a house is too much, to spend five years income for both is totally irresponsible, it is begging for disaster.