Basic affordability metrics

[cr]

You’re right SDE it is, (though in 2006 SD was 5th). Even if the median is $80k employment is dropping in SD along w/ prices, which goes against the argument that prices can’t drop because everyone wants to live here. With a median homeowner household income of $90k, median prices should be closer to $300k.

[SDEngineer]

Agree. I’ve done several back-of-the-napkin calculations using several different measurements (household income to historical house price ratio, FMV rent to house price ratio, and wage inflation applied as house price inflation over the past decade or so), and they all tend to wind up in the 300k-330k region for what a normal trendline median price should be today. That matches very well with what a lot of the housing bears were saying at the peak of the market in ’05 when the bears arguing for a return to trend said the market had to lose about 40% of its value to return to normal. We’ve only seen about 25% of that value lost – less in the more desireable areas (though according to the Case-Shiller index they were less inflated anyway, so the drop will be less severe overall with them).

[SDEngineer]

Agree. I’ve done several back-of-the-napkin calculations using several different measurements (household income to historical house price ratio, FMV rent to house price ratio, and wage inflation applied as house price inflation over the past decade or so), and they all tend to wind up in the 300k-330k region for what a normal trendline median price should be today. That matches very well with what a lot of the housing bears were saying at the peak of the market in ’05 when the bears arguing for a return to trend said the market had to lose about 40% of its value to return to normal. We’ve only seen about 25% of that value lost – less in the more desireable areas (though according to the Case-Shiller index they were less inflated anyway, so the drop will be less severe overall with them).

[SDEngineer]

Agree. I’ve done several back-of-the-napkin calculations using several different measurements (household income to historical house price ratio, FMV rent to house price ratio, and wage inflation applied as house price inflation over the past decade or so), and they all tend to wind up in the 300k-330k region for what a normal trendline median price should be today. That matches very well with what a lot of the housing bears were saying at the peak of the market in ’05 when the bears arguing for a return to trend said the market had to lose about 40% of its value to return to normal. We’ve only seen about 25% of that value lost – less in the more desireable areas (though according to the Case-Shiller index they were less inflated anyway, so the drop will be less severe overall with them).

[SDEngineer]

Agree. I’ve done several back-of-the-napkin calculations using several different measurements (household income to historical house price ratio, FMV rent to house price ratio, and wage inflation applied as house price inflation over the past decade or so), and they all tend to wind up in the 300k-330k region for what a normal trendline median price should be today. That matches very well with what a lot of the housing bears were saying at the peak of the market in ’05 when the bears arguing for a return to trend said the market had to lose about 40% of its value to return to normal. We’ve only seen about 25% of that value lost – less in the more desireable areas (though according to the Case-Shiller index they were less inflated anyway, so the drop will be less severe overall with them).

[SDEngineer]

Agree. I’ve done several back-of-the-napkin calculations using several different measurements (household income to historical house price ratio, FMV rent to house price ratio, and wage inflation applied as house price inflation over the past decade or so), and they all tend to wind up in the 300k-330k region for what a normal trendline median price should be today. That matches very well with what a lot of the housing bears were saying at the peak of the market in ’05 when the bears arguing for a return to trend said the market had to lose about 40% of its value to return to normal. We’ve only seen about 25% of that value lost – less in the more desireable areas (though according to the Case-Shiller index they were less inflated anyway, so the drop will be less severe overall with them).

[jpinpb]

SDE – Now you’re making me question Case-Shiller on the more desireable area. I’ve been monitoring PB off and on for almost 20 years, very ferverently in the last 8 years. I’d go out on a limb and say the median SFH in PB in 2000, which I’d say is before the whole subprime thing took off, was about 400-450k. The median home in PB now is about 650-750k. That’s close to double. Maybe I’m wrong. I’m trying to learn. Is that normal appreciation in 8 years? Actually at peak, I remember some places selling for 800k.

[jpinpb]

SDE – Now you’re making me question Case-Shiller on the more desireable area. I’ve been monitoring PB off and on for almost 20 years, very ferverently in the last 8 years. I’d go out on a limb and say the median SFH in PB in 2000, which I’d say is before the whole subprime thing took off, was about 400-450k. The median home in PB now is about 650-750k. That’s close to double. Maybe I’m wrong. I’m trying to learn. Is that normal appreciation in 8 years? Actually at peak, I remember some places selling for 800k.

[jpinpb]

SDE – Now you’re making me question Case-Shiller on the more desireable area. I’ve been monitoring PB off and on for almost 20 years, very ferverently in the last 8 years. I’d go out on a limb and say the median SFH in PB in 2000, which I’d say is before the whole subprime thing took off, was about 400-450k. The median home in PB now is about 650-750k. That’s close to double. Maybe I’m wrong. I’m trying to learn. Is that normal appreciation in 8 years? Actually at peak, I remember some places selling for 800k.

[jpinpb]

SDE – Now you’re making me question Case-Shiller on the more desireable area. I’ve been monitoring PB off and on for almost 20 years, very ferverently in the last 8 years. I’d go out on a limb and say the median SFH in PB in 2000, which I’d say is before the whole subprime thing took off, was about 400-450k. The median home in PB now is about 650-750k. That’s close to double. Maybe I’m wrong. I’m trying to learn. Is that normal appreciation in 8 years? Actually at peak, I remember some places selling for 800k.

[jpinpb]

SDE – Now you’re making me question Case-Shiller on the more desireable area. I’ve been monitoring PB off and on for almost 20 years, very ferverently in the last 8 years. I’d go out on a limb and say the median SFH in PB in 2000, which I’d say is before the whole subprime thing took off, was about 400-450k. The median home in PB now is about 650-750k. That’s close to double. Maybe I’m wrong. I’m trying to learn. Is that normal appreciation in 8 years? Actually at peak, I remember some places selling for 800k.

[bob2007]

I scanned this thread quickly, and I don’t yet see a similar post. The SD Union today profiled a family where the wife/nurse and husband/teacher had w2 income of $248k. They were conservative and had cash savings as well.

[bob2007]

I scanned this thread quickly, and I don’t yet see a similar post. The SD Union today profiled a family where the wife/nurse and husband/teacher had w2 income of $248k. They were conservative and had cash savings as well.

[bob2007]

I scanned this thread quickly, and I don’t yet see a similar post. The SD Union today profiled a family where the wife/nurse and husband/teacher had w2 income of $248k. They were conservative and had cash savings as well.

[bob2007]

I scanned this thread quickly, and I don’t yet see a similar post. The SD Union today profiled a family where the wife/nurse and husband/teacher had w2 income of $248k. They were conservative and had cash savings as well.

[Author]

Posts