“Given that the median income in this county is less than $100K, what is the median house price again?”
This is true, but misleading – the numbers are a bit off, and median household income never buys a median house. The lower income tiers, whether by being unskilled, or young and at the bottom rung of their careers, don’t buy houses, they rent – even now, after the age of easy money, in Southern California as many households rent as own (it’s very close to a perfect 50/50 split). This is less true in other areas that have significantly higher homeownership like the midwest, but out here costs have always been high enough that there have been a great many renters. There was a post on here not too long ago that linked to a site that had the breakout of median household renters income in San Diego (don’t remember the site, but it was in one of the posts or articles on this site. IIRC, it was about 43K), and after backing that out of the figure they used for overall median household income (of all types, 72K), the number for median homeowners household income worked out to about 95K.
The take home figure for 100K is also a bit light – it should be a bit higher than 6k/mo take home. At those numbers, and assuming a median household income of 100K buying that median home, it still works out to better than 40% of their net (though it’s down to an approvable 28% of their gross). *EDIT* oops, just noticed that the OP had reduced the gross by using a full 15% to 401K. Certainly a smart thing to do, but I doubt most households do that, nor do I think it’s really necessary unless they started late on their retirement savings. Others will have decent matching also reducing the %(in my case, I get 6% matching, and am putting only 6% of my own dollars towards the 401K).
It’s not nearly as overpriced or unaffordable as it used to be (though it’s still well above historical norms for this area). Of course, prices are still going to fall, but I think it’s more now driven by factors other than that people simply can’t afford a home (ie. it’s still significantly cheaper to rent an equivalent home, and a great many can’t get financed in the current credit crunch, and of course, there’s still tons of foreclosures going to hit the market from people who did buy well above their means during the bubble using “creative” financing products).
