Home › Forums › Housing › What ARE the fundamentals? › back in line with the
back in line with the fundamentals”
barnaby33,
That was Rich Toscano’s statement in his commentary today.
If I was shopping for a new house, I would certainly want to have a clue as to what are these fundamentals that everyone is talking about.
The simple answer is that home prices and payments have far outpaced income growth and rents from about 1999 to 2005 (for San Diego).
Have you read the primer on this web site ? http://piggington.com/
In the top center there is a box that says “A Bubble Primer”.
Check out
Risks of a Serious Home Price Decline
Evidence of a Southern California Housing Bubble
http://piggington.com/historical_home_prices_payments_rents_rates
The San Diego Housing Bubble
As for precise quantitative measures of how far back the ratio of prices to incomes or prices to rents need to return to, that is the 400,000 dollar question.
