You make an excellent point.
Is there a bubble in either residential or commercial RE markets?
Think of a "flow of funds" model. Stock returns in the US have been hovering in the 10,000 - 10,750 range. Returns overseas are flat. Bond markets offer low rates. Where do Americans and overseas investors put their money? The US real estate market.
The problem will real estate price deflation will come when 1) US equity markets rebound, 2) US long-term interest rates start rising, and 3) foreign equity markets improve. Any of these outcomes will cause a flow of funds AWAY from real estate and into other capital markets.
But until then, I can't envision a "crash."
I testified to the US Senate on the real estate market. Of course, no one listened (each Senator had their mind made up before the testimony).
Expect those senators to suddenly change their minds when the crisis comes just around the corner.
The same dynamic could be happening to China issue. For a long time, senators or most U.S. elites have been so indifferent to potentially disastrous problems lurking in Chinese economy, or China's political ambition propelled by Han nationalism.
However, suddenly, last spring in this year, a mood swung overnight in both political parties of U.S., business elites, and executive branch. For the first time, when Rummy trashes China, the rest seems to listen and turn their backs on China.
I don't know if this has been brewing in the backroom discussion among power and business elites for a while. However, the change of their public stance was rather abrupt to me. If you go back to the time as recent as 6 month ago, they were all still accommodating China.
The problem, IMHO, with the SF Market in particular? The City is pro-government, anti-capitalism. Are major investors going to want their investment properties ransacked, looted? Employees assaulted? Is it a real fear. It can be a real fear when it is clear that the police are not being backed up in re protection of private property -- by City Hall Bureacrats.
Years back, under Mayor D-Willie Brown (aided by Amos Brown et al), SF began "seizing" PG&E substations under the guise of "eminent domain". What else might be seized via "eminent domain in SF". Could be a seller's market, if the right friends can be had in City "venues"...
Witnessed some amazing things in SF rusing the Low-Income Housing -- wherein D-Politocos and Pals were able (and taxpayer funded assisted) to purchase "low-income" (read: RIGHT DOWNTOWN") properties... for $1. Watched the laundering of ownership continue. Perhaps this is a San Francisco-specific bubble, some are worried about... How long can the shell game continue?