San Francisco might be the most expensive city in the country, but it's also the biggest risk for a housing bubble, according to a new study by UBS Wealth Management. According to the bank, the study is meant to "track the risk of housing bubbles in global financial centers," and San Francisco is the fifth highest spot in the world for bubble risk. London leads the way, followed by Hong Kong, Sydney, and Vancouver. Cities in the bubble zone face the risk of a large price correction if there's a "change in macroeconomic momentum, a shift in investor sentiment, or a major supply increase."

The study shows that, between 1985 and 2009, when a city got a rating of 1.0 or above on the bubble index a real price correction on the average of 30 percent hit within three years 95 percent of the time. San Francisco is teetering right around that 1.0 mark, well above other U.S. cities like New York, Boston, and Chicago, which are all fairly valued according to UBS. The report also notes that "investors in overvalued markets should not expect real price appreciation in the medium to long run."

San Francisco's run has been "fueled by foreign demand and a fast growing economy (Silicon Valley), although prices have risen much faster than incomes," says that report. The only question left to ask is what comes next?

· UBS Global Real Estate Bubble Index Study [Agefi]