8-10 rent multiplier is for multi-unit properties not SFR – when I started shopping in 1997/98 well located properties that I was willing to live in (one of my criteria for buying) were already selling for more than 8-10 times rents – in 2000 I paid 11.5 times rents for a 4plex in Mission Beach and thought I was paying too much – the last 4plex I sold went for 18 times rents
other forums have talked about rent multipliers for SFR – probably more like 12-14 or higher depending on the property – remember that SFRs are for you and your family to live in and are NOT investments for positive cashflow (I’m generalizing)
my sources for data are my feet, eyes and brain – I get to know the areas that I am interested in and I gather all of the data I can find on rents, sale prices, listings, etc – every area is different and local factors make averages less meaningful – for example, being walking distance to an especially nice park doesn’t show up in average rents or sales prices
1998 prices:
> I believe 1998 is when the bubble started – rents and sales prices began to diverge at this point
> all bubbles throughout history have been fully retraced (for all you naysayers: identify one that hasn’t and don’t include NASDAQ or DOW until at least 2011)
> retracing the bubble takes us to 1998 – overshoot would be even lower
