Historically, median home prices in SD county have been around 7 times annual median income. Given the economic conditions of stagflation, restrictive credit and increasing unemployment, this multiple may swing lower towards the national historical average of 4 or 5 times annual income. At today’s prices, we are still about 11 times annual income. So seeing a 40% reduction seems completely possible by 2009. Especially with the current speed of the price reductions we’ve been seeing since June 2007.
