That would be true in a zero-sum world, but that's not the reality that we live in.
Salaries do NOT have to keep up with the price levels of homes.
How can that be, you ask?
Easy. Lifestyles change.
First, we sent our wives to work. That's kept up our standard of living as well as our home prices.
Next, we started having fewer children.
Finally, we started leasing out our own rooms from our homes (in the areas under discussion - that really isn't necessary in my region).
Look at coastal areas of California. Everywhere you look, the streets are packed with parked cars.
Why? Because people are violating the zoning laws by leasing out their garages, attics, and bedrooms. Multiple families are now living in what old-timers would call "single-family dwellings".
So the streets are packed with parked cars because the parking was developed back when only 1 nuclear family lived in each house.
And there are more than 1 family living in each house in those areas because that's the only way that they can afford to live there.
People are metaphorically sacrificing their standard of living on the alter of "I've got to live in a hip/cool neighborhood at any cost - style philosophies".
They are also having fewer children. Why? To save money and time to help prop up their standard of living. We see this in spades in Japan today.
Supply versus Demand. Salaries aren't part of that equation. If/when salaries don't keep up with real-estate, you see the wife going to work, fewer children, and rooms getting leased out.
And that's not going to change unless people suddenly decide that they want to live in areas that permit higher standards of living on lower salaries.
If you want to watch a real-estate bubble burst, then simply look for areas that have declining populations. It's pretty tough to keep up real-estate prices, no matter how high the salaries of those who remain in the area, when the net population of that area is declining.
Conversely, it's pretty hard to drive down real-estate prices when the population of that area is increasing.
If you aren't looking at the population trend, then you won't accurately predict what the housing market will do, no matter how well you guess at the current and future states of the economy.