My totally unscientific measure is that houses will still return to a level affordable by two average wage earners in any given area. Say, an elementary school teacher married to a policeman doing about the same — so somewhere in the neighborhood of $300K, which is still more expensive that most areas of the country.
Another unscientific measure is that the mortgage for a given area will be slightly more than rent. So, a house that now rents for $1600 in Mira Mesa would cost about $300K. Granted the houses I’ve seen rented for $1600 in Mira Mesa are not places you would want to raise kids.
