I think this effect is a bit more understated for the Bay Area, because San Francisco is only really desirable domestically, and that’s a function of jobs, which the Bay already accommodates by incentivizing commercial over residential development. But there’s a realistic cap to that; eventually industrial boomtowns like Pittsburgh and Chicago reached a more steady rate of growth, and I would expect San Francisco to do the same.

The real places this effect kicks in are global status cities like New York or London, where it’s a status symbol in every country’s elite class to have a vacation home there. It may actually be impossible to supply both foreign and domestic demand for residential via the market.