esmith,
I dont really agree with all your numbers. They seem to optimistic.
First check the main page just below the latest entry. In the graph Rich graphs wages since 2001 and they are up maybe 18%, not 30%. I know you said 2000, but I dont think there was a huge jump in wages the year we started sliding into the last recession.
Second, this is a lower middle class area unless you are north of Calle Cristobal. Overall wages may be up ~18%, but the bottom half isnt feeling the good times. Remember the supposed jobless recovery of 2003-05? No jobs result in no wage growth. What wages/jobs growth their was for this segment of the population was in real estate, and over inflated as you said. It wont keep.
Third, it isnt like what wage growth was seen isnt being eaten away by gas, utilities, food and other inflation that is alot higher. To assume that people can contribute the same level of income to payments now as they could after the longest and most broadly felt boom in the last century is ignoring the realities of 3.50 gas.
Fourth, sure interest rates are 5.8%, for you. Most middle income people dont have $80000, let alone that in cash to invest. And those nice low interest rates you use are only for the best buyers. Most of us dont actually get that rate, especially from risk adverse banks demanding 20% down payments that the “buyers” just dont have.
People who can buy in carmel valley can easily buy in MM, but that doesnt mean that they want to live in MM.
Plus, something for FLU and all the rest to think about. In the same graph rich posted, rents are also tracked. They are up way over wages. (~10% more) If we are really sliding into a recession, with the job losses and everything else, do you really think that you can get a +10-15% rise in rents as is being discussed in other threads? The easy increases have already been had, anymore and you seriously jeperdize demand. I know, as I just posted, my current place sat empty for 2 months until they dropped the increase and accepted our application.
