Need I point out that in San Diego during the early 80’s the average home price reflected 3 to 4 times annual income? So yes, when rates went up, prices stagnated rather than declined. Stagnation during inflation has the net affect of decreasing the REAL price.
Now, in North Park for example, the average house is anywhere between 7 and 10 times average wages.
It all seems pretty simple, never before have we had housing prices so out of whack. What happened in the past cannot be a predictor of the future.
Pretty simple if you ask me, interest rates will have a far far more drasitic effect compared to any other time.
