SDR, I think you are missing some things about your dated concept. You keep saying that the 3X is dated, but how come it holds true for the vast percentage of America, what makes San Diego so different. I follow your interest rate and tax rate logic, but interest rates are the same all over the country, so this has no bearing on the national value disparity. If anything interest rates are higher in SD because the larger number of jumbo loans. Additionally, the fact that the rates are so low, just provides more reason to believe that the SD market is more volatile.
As to taxes, yes we have lower prop taxes via prop 13, but when you buy a new home your first years rate is much more in line with the rest of the country. It only becomes more reasonable when you have owned your home for many years and there is an appreciation bubble. So this does not help new or repeat buyers from a cash flow standpoint (and buyers set the price of a home, not the sellers)
To your 75th percentile issue, this is not true nationally. The Median income can not responsibly afford the median home, and that is largely a California concept. The reason why the 35+ percent of people rent nationally is not necessarily because they can not afford to buy something on paper, but for a variety of other reasons. People can not save for a down payment, they have horrible credit/debt, they do not want to buy for mobility reasons, and a host of others.
So in conclusion, there is no good reason (other than rampant speculation and government intervention) as to why San Diego is 214th out of 225 metro areas in terms of affordability.
