[quote=CA renter]
The last RE cycle topped in ~1989/1990, so that ratio would make sense for 1990. Prices in some very desirable areas crashed ~40% during the downturn of the early 90s, at they didn’t have this massive credit bubble to contend with.
To be sure, things are MUCH better today than they were in ~2004-2007, but when you consider the very large risks to our economy, I think things are still priced optimistically.[/quote]
You seem to discount the interest rate. The ratio of price to income is similar to 1990, yet in 1990, interest rate was much higher. What do you think that ratio would be if people in 1990 can get <5% 30 year fixed rates?
