Powayseller: Thanks for bringing up the point re: median price / per capita income. But you were talking about a price-to-income ratio. I was talking about price. Obviously two different things.
In addition to the CME link I posted, you can also check out the Office of Federal Housing Enterprise Oversight’s San Diego housing index (http://www.ofheo.gov/HPIMSA.asp) and it will also tell you that in the first half of the 80s San Diego housing prices only dipped by a small margin (around 3 to 5% during the whole period) after prices more than doubled in the latter half of the 70s.
You said “currently we are at med home pr/per capita inc = 14.5. To get back to the trough of 9, we would need a drop of 30%”. Actually we don’t, a 30% rise in income will achieve the same thing even if housing prices don’t drop.
What might have been the case was that during the early 80s, instead of a price drop, we saw income rising fast enough to bring the price-to-income ratio back down to a reasonable level, before prices rose again in the late 80s.
I’m not arguing that it would be the same this time around but for someone like me who’s trying to profit from the so-called “burst of the bubble”, I must take into consideration the possibility that if the economy continues to expand and income levels somehow find a way to rise (where the engine of growth will come from I have absolutely no idea), SD prices could stay flat (or just correct by a small percentage) over the next few years.
Having said the above which is me playing devil’s advocate to myself, I still tend to believe that this time prices have gone way too high compared to income, and when the correction does finally come, it will probably be steeper than previous cycles.
Peterm: Unfortunately CME and OFHEO only offer stats up to 2005Q3 so it’s lagging. Could you post the link for this MSL tracker site you mentioned ? thanks