FormerSanDiegan – I need to correct what I wrote. Typically you can buy a home for 3-3.5 x family income. Typically, 64% of people nationwide owned homes, so you’re right, we cannot use the median wage earner’s income at a 3 multiple. The charts in the Bubble Primer show this: the ratio is typically between 9 (peak) and 7 (trough).
mephisto – timing the real estate market is easier than people think. Don’t use the median – it lags by one year. Use months inventory and most important, work with an honest realtor who will know from his daily work in the field when the tide shifts, sales pick up… But not to worry if you are a few months late; real estate moves very slow. Eventually prices will stop dropping, and rise, but I expect that rise to be gradual before picking up momentum. There should be an entire year in which to make a decision.
As for me, I am not looking at MLS, Open House, or visiting builders. I am content to rent for 5 years. Why in the world would I want to look at homes now? To me, a house is like a big stone around my neck, a big turn-off, an albatross. Looking at homes now is like reading the Lucent Annual Report in 1999. One word: yuck! Sorry to offend anyone, but homeownership today, to me, is just plain yuck!
