It’s the demographics of various areas vs. their prices that tell me it’s out of whack – not what I think my personal income should support.

Look at the median income in 4S Ranch or CMR. It’s not upwards of 200K/yr. In 4S, it’s actually below 100K/yr, and in CMR, it’s only a little above (about 120K/yr).

While some certainly probably bought in relatively smartly (funding a large down payment with proceeds from a house sale during the bubble for example), and so will be able to afford it, there will also be plenty that bought more home than they can afford with option ARMs or similar. And in the long run, these “move-up” types of houses will need to drop in price so that post-bubble “mover-uppers” can get into those houses and afford them with the down payments they get from selling their post-bubble first houses.