[quote=XBoxBoy]Overall, I think you’re missing what I’m saying in my post. While I initially set out to try and answer how much of recent price changes are due to issues like people moving from out of town versus interest rates, what I ended up showing is that over the last 34 years almost all the rise in home prices in San Diego can be attributed to interest rate changes and inflation. Because my charts show 34 years of data, only a very small part of the charts are specific to the current situation. And the part that is for the last year is for San Diego overall, not a specific area.
But the bigger take away for me is that if I am correct that home price increases are largely correlated to interest rates and inflation, that means a lot of the narratives told in the past about why home prices are going up were false. Which leads me to be rather skeptical of the narratives I’m hearing now.[/quote]
I understand what you’re trying to say. But I think you put more weight and correlation to rates than inflation. That’s what I’m trying to convey, is that wage inflation is probably a better correlation than rates.
This is why I’m trying to convey about the top 20% income inflation. 20% is some random number I pull from the sky, but the point is that someone making minimum wage would not be buying houses. They’re renters.
