I’m curious why you think it only needs another 10% haircut. Median household income is 60k.
Here’s my reasoning. Median resale price of a detached house in MM in 2000 was around 240k. Average interest rate on a conforming 30-year fixed mortgage was 8.1% (monthly payment $740 per $100,000 borrowed).
Today interest rates are around 5.8% or less ($585 per $100,000), incomes are up 30%. You get the same level affordability if median price is 240k * (740/585) * 1.30 = $395k. Monthly payment $1850, property tax $300-350, interest deduction at least $450.
December median was around 440k.
Two caveats. First, some of the 30% increase in incomes is bubble money, it may go away. Second, 5.8% interest rates may not stick around for too long.
P.S.
average detached sales price in 92126 in December 2000: $265k
average detached sales price in 92126 in December 2007: $458k
