There is a bubble on salaries in the Bay area. Only because of the real estate bubble that has been artificially created there. It will eventually burst as more companies will seek to hire in cheaper areas.
Real estate prices are high, because the Bay Area is a very desirable place to live, there are people who can and will pay the high price, and the supply of housing is low.
Salaries are high because big companies are fighting for talent (demand), and the supply of talent is low.
Clearly you don't live in CA. Homeowners vote more than renters, and they will never intentionally vote for policies that will put them underwater on their own mortgages.
Housing prices here are likely to stabilize, but they're not going to start seriously declining unless the job market starts declining, too.