That's the result of Proposition 13, which holds property tax values very low. Without it, the rising cost of house would increase property tax payments accordingly, and financially, it would be better to sell rather than hold.
One solution is to double-down on prop 13 ideas, and also add limits on how much house sale can be taxed. Another is to slowly start dialing-down prop 13 and allow higher tax rate increases. Both of those have problems.