Count me as an extreme bear on SF/SV real estate. Three big factors here:
(1) How fragile is SF/SV's "tech capital" status?
SF/SV has no monopoly on talent. There are top engineers and devs everywhere. What it has a monopoly on is smart investors who are willing to take risks and top-notch accelerator programs.
It's ironic that the people who build the net can't use it to escape one of the most absurd rent bubbles in the Western world. The problem isn't that devs and founders aren't willing or able to do this. The problem is that investors and mentors tend to be older people who are not "net natives" and are not yet comfortable doing deals or mentoring remotely.
Younger angel investors -- or those who are more net-native and comfortable with telework -- will already fund things far away, sometimes without even physically meeting anyone involved. I see this happen regularly. Startup crowdfunding is also going to add a new source of geographically unconstrained capital.
As older VCs and older accelerator/mentor types who are not this comfortable with the net retire and are replaced, expect to see way more of this... especially since the real estate costs of SF/SV are a serious liability in terms of runway and recruiting capability.
(2) The SF/SV housing crisis is partly political.
SF/SV are geographically constrained and earthquake codes do impose additional costs on vertical construction. Those are indeed fundamentals. But the rest of the "shortage" is political and is due almost 100% to self-serving NIMBY resistance. That NIMBY base is being attacked from all sides now.
If the NIMBY wall crumbles, you'll see a construction boom to rival all construction booms. Supply will flood the market. If this also coincides with a dip in tech financing or factor #1 above coming into play, blood will be on the streets.
Edit: another factor is foreign speculation, and if SF/SV (wisely) copies Vancouver's new foreign real estate speculator tax that will help deflate this factor too.
(3) Why again should I come to SF?
Back before this madness SF was one of the greatest cultural centers of the world. It was quite honestly one of the coolest places in the world.
Real estate hyperinflation is pricing all that out. The artists and musicians and true 'hackers' and freaks and all the rest of the interesting people who made SF great can no longer afford to live there.
So why again should I pay through the nose to live in what's rapidly becoming a giant glorified office park for venture capitalists and big tech firms?
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My own anecdote:
We've repeatedly resisted coming up there. I did the math. Doing so would triple our burn rate. We are "default alive" and growing today, but up North we'd be dead eight months ago. (We being this: https://www.zerotier.com/)
Investors who are not willing to invest outside SF/SV should just skip the middle-man and cut checks directly to real estate speculators.
The rent I would personally have to pay (I have kids) would be about 10% higher than my total cost of living in Southern California... and SoCal is not considered "cheap" by any standard. Last time I checked out apartments in SV I found a place that cost almost my total cost of living in SoCal where the lobbies smelled like dog piss. I call Silicon Valley "the world's only six figure slum."
The tech scene in SoCal is booming. Everyone I talk to says they have zero interest in going North because "you can't afford to live there unless you are rich."
Edit:
The parent is spot on, but I'd add this: while Manhattan is comparable to SF/SV, New York as a whole is considerably more affordable. That's because it has very good transit. You can easily live further away and commute into Manhattan, and you can read a book on your commute instead of staring at the butt of a car. You can also live without a car pretty easily in NYC and even surrounding suburbs, which really mitigates the cost of living. You can only do that in SF if you never want to leave the peninsula.
More and more people (and businesses) are wondering why they are allowing themselves to be raped by real estate when geographic diversification is easier today than it has ever been in all of human history. Seriously. Think about this. These real estate bubbles as we move into the true broad cultural uptake era of the Internet are like a bubble in fossil fuel prices six months after over-unity nuclear fusion has been demonstrated. Such bubbles have one and only one role: to allow smart money to exit and hand the (burning) bag (of dog crap) to dumb money. Every time you read about how this real estate bubble is permanent and will never deflate or how you are nobody if you don't live in one of 3 cities remember that you are probably reading a submarine ad sponsored by someone who wants to make sure they can exit at a healthy profit before reality ensues.
(Side note: given the Moore's Law growth of solar and batteries and the interesting progress in fusion I do wonder if the "peak oil" hysteria of the past 10 years wasn't exactly that... a final profit taking and exit opportunity for a soon to be obsolescent industry.)
In the long term SF/SV desperately needs a real estate crash if the region wants to have any hope of holding onto its culture or any of the other things that make it great. If a crash does not occur eventually the exodus from this madness will reach a tipping point and the city will lose its soul forever. Then the crash will still eventually come, but it'll be less like a correction and more like Detroit in the 80s.
Edit #2:
To avoid perpetuating age-ism I must point out that I know people in their 50s and 60s who are pretty "net native." It's a mentality thing. There is a bit of an age correlation but that's because not everyone remains open to letting their paradigm shift as they age. Ironically it is often the very successful who have big egos and inflated images of their own intelligence who resist this the most. It's one of the many ways that having a big ego makes you dumb.