I would say the range for gross income multipliers for houses (not apartments) probably won’t get any lower than 10x gross annual rents no matter what happens. 11x annual income would probably be more realistic. That’s as an average throughout the region, meaning some of the beater neighborhoods would be a little lower and the more desireable areas would be a little higher. It wouldn’t surprise me at all if La Jolla’s desirability bottomed out no lower than at 13x gross, maybe even higher.
There’s no saying that some areas like La Jolla and Del Mar will unwind as much (percentage wise) as the regional average. If the region corrects at -50%, these high-demand areas may only correct at -25% or -35%. The arguments of “they’re not making any more land, everyone wants to be here, etc” don’t necessarily apply to the region as a whole but they do apply to these much smaller high-demand areas.
I could be way wrong, but I’m just not seeing La Jolla SFRs bottoming out to $350,000.