California homes are about 35% to 40% overvalued

[NotCranky]

“Therefore, it is more likely that the 70th or 75th percentile in income is likely to line up with the median price of a single family home. Recently it was as high as the 90th percentile. At the last low in San Diego in the mid 1990s it approached the 60th percentile, considerably above the median.”

As usual you have smart thingsto say on the topic at hand that tend to balance out the discussion.

“You know it does cost about 100 sqf to maybe 150 sqf to build these things (not counting the cost of land),
so it’s not going to zero guy’s,”

It takes something to grow beautiful tomatoes too…but it doesn’t stop some from rotting on the vine. What I am saying, and it applies to both of your comments, is that housing is only as strong as the economy. We know it is going down because of the crazy lending based appreciation but we don’t know what kind of economy will be there to support it and for how long. The amount spent on something or what people were previously paying for something, regardless of any multiple of salary, could possibly be rendered historical footnotes. I doubt it but, for the sake of argument, I will pose this question.. how much are these houses worth in Mexico? Muy Poco.

[golfproz]

I did not include land, permits or utilities in the cost I quoted. That is just building costs for the home itself. A buddy of mine works for one of the major builders and is in charge of a couple of developments. The one he is just finishing up is running $44 sq/ft on average for construction costs (norcal). That’s a low end tract of SFR homes, nothing fancy. Another tract he is doing with nicer homes and more complex builds is running just over $60 sq.ft. The cost difference depends on how many bathrooms, windows, skylights or fancy walls, ceilings, alcoves etc. Even the nicer stuff, what we would consider high end tract homes are probably under $80 a sq/ft for construction costs. Now, custom builds or one-offs are going to be WAY more expensive. To build a single custom home is easily going to run you north of $150 sq/ft and probably more than $200 if it’s a nice home.

[golfproz]

I did not include land, permits or utilities in the cost I quoted. That is just building costs for the home itself. A buddy of mine works for one of the major builders and is in charge of a couple of developments. The one he is just finishing up is running $44 sq/ft on average for construction costs (norcal). That’s a low end tract of SFR homes, nothing fancy. Another tract he is doing with nicer homes and more complex builds is running just over $60 sq.ft. The cost difference depends on how many bathrooms, windows, skylights or fancy walls, ceilings, alcoves etc. Even the nicer stuff, what we would consider high end tract homes are probably under $80 a sq/ft for construction costs. Now, custom builds or one-offs are going to be WAY more expensive. To build a single custom home is easily going to run you north of $150 sq/ft and probably more than $200 if it’s a nice home.

[golfproz]

I did not include land, permits or utilities in the cost I quoted. That is just building costs for the home itself. A buddy of mine works for one of the major builders and is in charge of a couple of developments. The one he is just finishing up is running $44 sq/ft on average for construction costs (norcal). That’s a low end tract of SFR homes, nothing fancy. Another tract he is doing with nicer homes and more complex builds is running just over $60 sq.ft. The cost difference depends on how many bathrooms, windows, skylights or fancy walls, ceilings, alcoves etc. Even the nicer stuff, what we would consider high end tract homes are probably under $80 a sq/ft for construction costs. Now, custom builds or one-offs are going to be WAY more expensive. To build a single custom home is easily going to run you north of $150 sq/ft and probably more than $200 if it’s a nice home.

[Sandi Egan]

that would make the median home 7x the median income

Don’t you know that 90% of Californians make more money than the median income in California? If you don’t believe me, check out the mortgage loan applications for the last couple of years.

Also, haven’t you learned ANYTHING from this blog? Plain vanilla median income is meaningless and not applicable to SoCal. If you don’t use more sophisticated measures, at least consider using median income per lb of the earner’s body.

[Sandi Egan]

that would make the median home 7x the median income

Don’t you know that 90% of Californians make more money than the median income in California? If you don’t believe me, check out the mortgage loan applications for the last couple of years.

Also, haven’t you learned ANYTHING from this blog? Plain vanilla median income is meaningless and not applicable to SoCal. If you don’t use more sophisticated measures, at least consider using median income per lb of the earner’s body.

[Sandi Egan]

that would make the median home 7x the median income

Don’t you know that 90% of Californians make more money than the median income in California? If you don’t believe me, check out the mortgage loan applications for the last couple of years.

Also, haven’t you learned ANYTHING from this blog? Plain vanilla median income is meaningless and not applicable to SoCal. If you don’t use more sophisticated measures, at least consider using median income per lb of the earner’s body.

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