Let’s consider median household income versus median price at the the last bottom. First of all, by 2000, we already had a significant bounce in prices from the bottom. I sold a house in Clairemont in early 2001 that I purchased in 1996. The price change in those 5 years was 65% (we made no improvements to the house).
At the last bottom, by 1995-1996t, after a 6-7 year decline, recession, structural changes in the local economy (loss of defense jobs) and unemployment in 8-9% range the San Diego the median household income in San Dieog for 1995 was:
per Census Bureau (1995): 37,000+-700
per Labor Dept. (1996) 34,000
per Franchise Tax board (1995): 40,706
Let’s use 37K as an average.
The median priced single family home in 1995 was ~ 171 K (per the CAR).
That’s 4.6x the median household income.
At the prevailing 8% interest rates at that time we’re talking about 45% of the median household income required to service PITI in the 1995-96 time frame.
Also, from personal experience a median priced home back then would buy you a 3 BR/ 1 Bath house in Clairemont with up to 1200 sq ft. You needed to make about 60K to qualify for a typical loan. Well above the median household income.
The concept of median house prices relating to qualification ratios at median household incomes is fantasy.
