(US zoning should still be fixed, a component of YIMBY policy, but higher interest rates and reduced immigration are also contributors to real estate prices coming back down to reasonable levels and valuations)
I live in the Boston area, where academia, research, and the biotech industry bring in a lot of people and money. Visa restrictions, research funding cuts, mishegas at the FDA, CDC, etc., and so on and so forth, have clearly had an impact on the local market. It's still pretty expensive here, no doubt, but the market has slowed. There's a brand new and entirely empty office tower a few blocks away. There's still a need for more housing, but developers aren't going to be rushing in to build if they think the price is going to be lower when they finish building.
Lots of slowing left to go. Note the rapid rise in the index after the pandemic [1]. The Fed misstepped pretty badly, in hindsight, by lowering rates near zero and buying up mortgage backed securities at the volume they did to support the capital markets when uncertainty was high. This has led to a painful macro situation where this excess aggregate real estate equity has to be burned off over time, through a combination of higher for longer interest rates and demand destruction. It’s from a combination of artificially low interest rates and mortgage rates from during the pandemic along with 30 year fixed rate mortgage duration, like a balloon that was squeezed from cheap capital market debt into real estate asset ownership. And so the unwinding continues.