>That explains why real estate is so pricey in Nassau County, but it doesn't explain Jersey City, which is a completely different market.

They are different markets, but they are still interconnected. Places like Jersey City are getting more expensive in part because places like Nassau County have essentially become exclusive enclaves with hardly any new construction compared to the post-WWII years, when new suburban houses were going up left and right on previously undeveloped land.

Today, large minimum lot size requirements and low-density zoning in NYC's suburbs mean that there is very little capacity for new development. People who would have bought starter homes in the suburbs 20 or 30 years ago are now finding themselves priced out. So younger affluent people are increasingly choosing to live in apartments in places like JC, which contributes to higher housing prices.

It doesn't help that we basically stopped expanding our public transit infrastructure in the middle of the 20th century. Which means that the cheaper, farther out areas are essentially off limits to people who want a reasonable commute to NYC.