[quote=an]You forget the key factor about RE (location, location, location). Not all area of RE increase at the same rate or decrease at the same rate. [/quote]

Actually, I haven’t forgotten this at all. My post isn’t meant to address anything about any specific location. In the last two charts I do compare expected house prices with Case Shiller for San Diego, but I don’t attempt to address anything more specific than San Diego in general.

[quote]Also, not everyone’s salary increase at the same rate. Not everyone can afford/buy a home, so instead of looking at overall inflation, maybe you should look at wage inflation for the top 20%. [/quote]
I’m not sure why we would want to limit to just the top 20% unless you are arguing they are the only ones who buy houses in San Diego. But, yes, using wage inflation instead of general inflation would be an improvement. I just didn’t find wage inflation data so instead used general inflation as a proxy. I’m assuming that over the course of 35 years the two remain reasonably correlated. Maybe I’m wrong about that though.
[quote]Here’s an article about the migration pattern over the last year:
https://candysdirt.com/2021/05/19/pandemic-sparks-a-rebound-in-residential-migration-survey-finds/%5B/quote%5D

Overall, I think you’re missing what I’m saying in my post. While I initially set out to try and answer how much of recent price changes are due to issues like people moving from out of town versus interest rates, what I ended up showing is that over the last 34 years almost all the rise in home prices in San Diego can be attributed to interest rate changes and inflation. Because my charts show 34 years of data, only a very small part of the charts are specific to the current situation. And the part that is for the last year is for San Diego overall, not a specific area.

But the bigger take away for me is that if I am correct that home price increases are largely correlated to interest rates and inflation, that means a lot of the narratives told in the past about why home prices are going up were false. Which leads me to be rather skeptical of the narratives I’m hearing now.