From the demand side of the equation I don’t really see how we can get away from monthly P&I vs. Income when a considerable % of people rely on mortgages in order to pay for their home. So in my equation I only can see two ways for valuations to continue to increase; 1) lower monthly P&I (interest only/creative financing/lower rates), or 2) increases in income or inflation. Based on laws enacted since the last bubble and interest rates increasing I don’t see scenario 1) playing out. scenario 2, is a possibility, but I don’t see income rising anytime soon in San Diego. From my perspective, it seems that San Diego will always be a Tier II market falling behind in pay when compared to large cities or metro areas like LA and OC/SF and Silicon Valley, and NYC. Unless we can get there income wise, property values will always have a comparative glass ceiling to keep SD prices in check. Inflation…I can see the government wanting controlled inflation somewhere around the 6%-8% range on the 30-year.