I believe Thornberg is speaking for all of CA when he says income ratios are below normal. Though I question income rising at all since 2006 until housing bottoms in 2010 at the earliest.
LA county numbers are deceiving with nice affluent areas like Bel Air, Encino, Malibu, etc, then Palmdale, Lancaster, and pretty much all of south central and east Los Angeles.
Those areas drag the average down, but were hit earlier in the correction. Damage to the higher end looks like it’s just warming up, and we’ve all seen the Credit Suisse reset chart where Alt-A and Option ARM resets peak in 2011.
So you’re right, a $250k house in LA is a dump. For now. But, contrary to what the article indicates the correction isn’t over. High priced homes aren’t selling and should start becoming REOs. That’s also why the median price is dropping, and why it’s a useless number.
Once high end REOs start selling we’ll probably see a jump in median price. However, if a $1,000,000 home at the peak sells for $500,000 at an aution it may bump the median up, but I wouldn’t call that a recovering RE market.
