Talking about undervalue/overvalue/fare-value in 1996-1997, here’s another example. Around this time, a 4/2 ~1300 sq-ft house in Mira Mesa was going for around $120-130k. Mortgage rate around this time was 7-8% for 30 year fixed. Rent for such house was around 1200-1300/month, rent for a 2/2 apartment was around $900/month. Mortgage payment of such house would be $800-950/month with 0% down. When you add in 20% down, monthly payment would be lower (obviously). So, PITI would be about rent if you compare rent vs buy at 0% down (but take rates w/ 20% down). It would definitely be cheaper if you put 20% down and take tax deduction into consideration. I consider that as undervalue. Rent has no government manipulation, so it’s as pure market driven as you can get in RE. If it’s cheaper to buy vs rent, then it’s under value. So yes, I consider 1996-1998 as under value.