The out-sized "demand" is largely coming from yield hungry investors and Chinese investors looking for a bolthole.
Both kinds of demand could easily be clamped down upon by raising property taxes - the victims of which would be wealthy foreign investors and people who have sat on one of the largest increase in property values in history.
Likewise, supply could be increased if local government were at all interested in doing so just by building 10,000-20,000 low income apartments.
If the government announced both, the cost of San Francisco housing would plummet within days.
Prices won't really go down unless people are forced to sell.
That said, I have sympathy for the LinkedIn engineers who were holding all their stock for a down payment. That's gotta hurt.