The first is most certainly true. The second may be true, but we'll have to wait and see how it impacts pricing. For now, you can't live in a building permit.
BTW, here's a graph of permitting and completions in SF for the last 60 years: http://www.spur.org/files/u41/f1.png
The article is from 2012. There are 140 projects under construction RIGHT NOW.
If you were looking for something that indicated overbuilding, I would look for declines in the ratio of rents/sale prices to median metro income. If housing is getting cheaper compared to incomes, that means supply is catching up to or outstripping demand. This could happen regardless of boom, bust, or stagnation.
See http://www.usnews.com/news/best-cities/slideshows/the-10-mos... and http://money.cnn.com/gallery/real_estate/2012/11/29/least-af... for examples.
For example (not in 2010-2011 range) in 4th quarter 2011 Sacramento lost 2200 homes to foreclosure vs. 160 for SF.
Foreclosures don't indicate overbuilding, they indicate that people can't afford to pay for their homes.