More signs are emerging that the Bay Area housing market has become unmoored from the normal interplay of supply and demand and may be entering the final stages of a bubble. Affordability throughout the Bay Area real estate market has plummeted this year. It is now approaching the lows seen leading up to the 2008 mortgage meltdown and housing market collapse. This may be a strong indicator that the area’s housing market doesn’t have much gas left in the tank.

Across San Mateo and San Francisco counties, only 14 percent of residents could afford the median-priced home. This is an astonishing indication of just how unaffordable the area has become, even as it boasts some of the highest incomes anywhere in the country. The decreasing affordability has been largely driven by tight housing supply and rising interest rates. The latter phenomenon has taken off in 2018 in a way that hasn’t been seen for more than a decade. And with interest rates continuing to rise, many experts say that total housing costs could continue to rise even further throughout 2018. But there will ultimately be a point at which so few people can afford homes that prices will have to begin a retreat. When that will be is anyone’s guess, but there is little doubt that a serious correction could hit sometime within the next five years.

The lack of housing supply has been a hot button issue throughout the state of California. Many of the state’s wealthy residents have been aggressive in passing sweeping zoning restrictions that have been meant to preserve the character and the beauty of the state. This has especially been true in San Francisco, where the city has imposed famously onerous restrictions on new building construction. Some reports have stated that opening a new restaurant in the city, even with minimal improvement to the property, can take years.

The downside of all of these restrictive zoning laws has been the creation of housing scarcity on a scale not seen in other states. This is one of the prime drivers behind the Bay Area’s jaw-dropping housing prices. But as even people in top 1 percent of all income earners find they cannot afford a small family home, the Bay Area housing market may come crashing from the stratosphere back down to Earth.