During the 2002-2012 period, the population of Shanghai increased by about 6 million (create the entire GTA in 10 years), and is expected to increase by another 5M in the next decade. in 1982, Shanghai had about 12M, now 30 years later, it has about twice as that.
In 2012, GDP per capital is almost $13,000 (nominal, over $20k in PPP) in Shanghai, from about $5,000 in 2002. What's the first thing when people get richer? They ask for better housing.
With this kind of growth in both population and wealth,extremely high demand is not surprising.
You are right, there isn't really any comparison between Shanghai and us. Totally different circumstances. We are a much smaller city with much slower growth.