“Consider house hunters in San Diego. There, the single-family home market is experiencing a significant price correction. In 2006, the market dropped 4.5 percent. Renters pay 38 percent of the cost of an owner’s mortgage payment, according to data from Torto Wheaton Research, a research firm owned by CB Richard Ellis. That’s compared with 79 percent nationwide.”
The context was ten tips for first time buyers and never buy when rents are out of line with prices, the assumption is S.D. prices are twice what they should be but most of the country is fine.
I posted that quote on another thread and I think the reason there isn’t much action on this one is that this theme is running through about ten threads and is routinely rehashed, read through some of the older ones. The El Cajon condo blowout thread has a alot of pretty in depth analysis of rent to price ratios. It’s easier to get into specific situations. In that situation, rents are about 1k and prices just broke through below 200k but most feel 150k isn’t too far away. The more desirable areas are holding stronger and are futher in time from when they will feel the pinch so it’s hard to give a pure number in all areas right now. Good rule of thumb is the national average, 20% premium over rent makes people buy, even with rent makes most buy, but more than double rent should make you rent.
