blackbox,
One problem with the median income logic is that the median income household does not generally purchase the median priced home. They never have except for during this bubble.
This is a rough example but you should et my point. Typically (of course there are exceptions), the bottom half of households (incomewise) do not buy homes. The upper half does. So effectively it is the 75th percentile that is buying the median priced home. Furthermore, in a high cost such as SoCal most of the buyers are generally skewed toward higher incomes more than in a more affordable area. The credit bubble put median and below income households in homes they never should have been in. With lending standards restored, median incomes household will once again only dream of owning median priced homes.
