why use Dec 2000 as your ‘base’ year, SD was already 3-4 years into the bubble at that point
I disagree, SD was barely out of the 90’s bust. Speculative bubble took off in 2003 because interest rates were falling a few years straight and it led people to believe that housing was taking off to the Moon.
What I ment was the people who the bank wants to lend to dont want to live in this area generally
One of the fallacies of the housing bubble was that you should buy the biggest house that the bank is willing to lend you money for. In a healthy market (especially in a declining market), living in a house costs you money because appreciation alone does not cover your interest payments. The bigger the house, the more it hurts your cash flow. So, you should buy the smallest house that will “work” for you. MM is not Carmel Valley but MM is not a ghetto, either. It’s like driving a Camry instead of a Lexus. Sure everyone likes Lexi but does it make most financial sense for everyone to stretch to make payments for them? or is it better to have 3-4 times the market value of the Lexus in your bank before you go and buy one?
That gives us a ratio of 5.1 years of income to cost of house (median income to median house).
Yes – ratio of median house to median income is higher than in 2000 – but all that money is borrowed and cost of borrowing is significantly lower today – so I say it’s a wash.
The same 1300 SFT home near Rancho Bernardo High school at Avinida Venusto end of street also ready to get at around 300K.
