[quote=jpinpb]
Someone told me a median income will never afford you a median home in San Diego. And at this rate, I’m going to agree.[/quote]
Popular fallacy. The argument goes something like this:
Low income people rent <=> The owners are upper 2/3 && median price needs to be affordable by median among owners => median price will never be affordable by median income family.
Here is the problem – in a balanced market the rent must cover the payment on the property. You cannot remove renters since they are ‘buying’ the property by making their payments.
Since markets across time/space/property tax rate are not balanced you can capture a snapshot that goes either way. But look at Austin, TX – Median Income $53K, Median Price $230K. With 20% down the price is just over 3.5x the income and the trend is down.
Or Rochester, NY back in 2006 (money.cnn.com) – $33K median income, $60K median price.
The premise of median income never being sufficient to buy a median priced property is as valid as the better known version of it – ‘the RE prices never go down.’
