That's only true if there is significant demand for only detached single family homes. If people are willing to 'compromise' and live in row-houses, duplexes, triple-deckers, etc where every home still has their own front door and, while smaller than some houses out in the burbs, are not particularly small, then you'll see the opposite effect, as a significant number of people who don't really care that much now have more options, leaving the single family homes for those who really really want them.