Agree. I’ve done several back-of-the-napkin calculations using several different measurements (household income to historical house price ratio, FMV rent to house price ratio, and wage inflation applied as house price inflation over the past decade or so), and they all tend to wind up in the 300k-330k region for what a normal trendline median price should be today. That matches very well with what a lot of the housing bears were saying at the peak of the market in ’05 when the bears arguing for a return to trend said the market had to lose about 40% of its value to return to normal. We’ve only seen about 25% of that value lost – less in the more desireable areas (though according to the Case-Shiller index they were less inflated anyway, so the drop will be less severe overall with them).
