Rt. 66, it is not a 100 year proven affordability index and you wouldn’t chop off the top third (the ultra-rich do not represent any more than the top 1%). I’ll try an analogy. Let’s say you are at the river and you drive past a boat with 10 women wearing bikinis. The six women with fake boobs who are most proud of their investment decide to flash you. You decide to use those six to determine the average breast size of the women on the boat, therefore your average cup size is flawed. This is the reason pollsters only look at likely voters, not the population as a whole.
You are trying to use the numbers to determine a price based on ALL PEOPLE BEING ABLE TO BUY A HOUSE, the fact is, not all people buy homes.
BTW, ask around, many of us believed a Temecula home in the 2500 sq ft range would hit low to mid 2’s, because in 1998 that house was being sold for 170-190k, using a variety of formulas (not just the sky is falling ones) it was easy to see. It is also easy to see that the 65k median income of Temecula puts a median house in the 150-170 range, using your affordability parameters, and you know what, you can get a 1300-2000 sq footer for that, easily. But the formula cannot be carried to coastal S.D., Hawaii, and other areas, because there is a hell of a lot more to R/E than pure ratios.
Avoid the Bear kool-aid and the Bull kool-aid, drink water!
