This brings up a good issue to touch on: income – the true measure of housing affordability, and what should be the main determining factor of home prices.
My wife and I are late 20’s, pay less than a grand for rent, only loan is school at less than 5%, and saving for a 20% down payment, though our area is still way overpriced and we are nowhere near able to afford anything.
The good ol’ NAR says average income in CA is $61,536, and we are above that, but still priced out.
Even if that number is right, it sure seems prices have a lot farther to fall. Then add to that tighter lending, and lowest average savings in history.