North park flips… relatistic prices?

[jstoesz]

why is median income a useless metric in a supply constrained market? I don’t follow.

People who live there have to eat right, they have jobs right. Your friend who makes over 150k a year is factored into that median income, just like everybody else.

[pemeliza]

Just because you cannot buy a house where you want to live doesn’t mean you cannot live there. Rental rates are actually pretty reasonable in SD and many people don’t mind commuting a long distance to work to get to areas in which they can buy a nicer house.

The reason median income doesn’t matter IMHO, is because there are not enough houses that change hands every year in SD for all of those people with the median income or higher to buy one. In other words, if prices were set based on median incomes, then there would be an instability because the demand would far outweigh the supply.

The other problem with the median income analysis is that it does not take into account other sources of wealth including stock options and equity from prior home sales.

[pemeliza]

Just because you cannot buy a house where you want to live doesn’t mean you cannot live there. Rental rates are actually pretty reasonable in SD and many people don’t mind commuting a long distance to work to get to areas in which they can buy a nicer house.

The reason median income doesn’t matter IMHO, is because there are not enough houses that change hands every year in SD for all of those people with the median income or higher to buy one. In other words, if prices were set based on median incomes, then there would be an instability because the demand would far outweigh the supply.

The other problem with the median income analysis is that it does not take into account other sources of wealth including stock options and equity from prior home sales.

[pemeliza]

Just because you cannot buy a house where you want to live doesn’t mean you cannot live there. Rental rates are actually pretty reasonable in SD and many people don’t mind commuting a long distance to work to get to areas in which they can buy a nicer house.

The reason median income doesn’t matter IMHO, is because there are not enough houses that change hands every year in SD for all of those people with the median income or higher to buy one. In other words, if prices were set based on median incomes, then there would be an instability because the demand would far outweigh the supply.

The other problem with the median income analysis is that it does not take into account other sources of wealth including stock options and equity from prior home sales.

[pemeliza]

Just because you cannot buy a house where you want to live doesn’t mean you cannot live there. Rental rates are actually pretty reasonable in SD and many people don’t mind commuting a long distance to work to get to areas in which they can buy a nicer house.

The reason median income doesn’t matter IMHO, is because there are not enough houses that change hands every year in SD for all of those people with the median income or higher to buy one. In other words, if prices were set based on median incomes, then there would be an instability because the demand would far outweigh the supply.

The other problem with the median income analysis is that it does not take into account other sources of wealth including stock options and equity from prior home sales.

[pemeliza]

Just because you cannot buy a house where you want to live doesn’t mean you cannot live there. Rental rates are actually pretty reasonable in SD and many people don’t mind commuting a long distance to work to get to areas in which they can buy a nicer house.

The reason median income doesn’t matter IMHO, is because there are not enough houses that change hands every year in SD for all of those people with the median income or higher to buy one. In other words, if prices were set based on median incomes, then there would be an instability because the demand would far outweigh the supply.

The other problem with the median income analysis is that it does not take into account other sources of wealth including stock options and equity from prior home sales.

[sdrealtor]

The other problem with using median income as a metric is what those with below median income are generally referred to as in many market. They are called renters. In most market, only a bit over 50% of households are homeowners. Logically the higher income folks tend to be the homeowners. While not perfect, it would be more accurate to use the middle of the upper 50% of households (i.e. the 75th percentile to compare to the median price home). The median income should be more logically compared to the entry level home price. I know this is far from perfect but its more accurate then median income vs. median home price IMO.

[sdrealtor]

The other problem with using median income as a metric is what those with below median income are generally referred to as in many market. They are called renters. In most market, only a bit over 50% of households are homeowners. Logically the higher income folks tend to be the homeowners. While not perfect, it would be more accurate to use the middle of the upper 50% of households (i.e. the 75th percentile to compare to the median price home). The median income should be more logically compared to the entry level home price. I know this is far from perfect but its more accurate then median income vs. median home price IMO.

[sdrealtor]

The other problem with using median income as a metric is what those with below median income are generally referred to as in many market. They are called renters. In most market, only a bit over 50% of households are homeowners. Logically the higher income folks tend to be the homeowners. While not perfect, it would be more accurate to use the middle of the upper 50% of households (i.e. the 75th percentile to compare to the median price home). The median income should be more logically compared to the entry level home price. I know this is far from perfect but its more accurate then median income vs. median home price IMO.

[sdrealtor]

The other problem with using median income as a metric is what those with below median income are generally referred to as in many market. They are called renters. In most market, only a bit over 50% of households are homeowners. Logically the higher income folks tend to be the homeowners. While not perfect, it would be more accurate to use the middle of the upper 50% of households (i.e. the 75th percentile to compare to the median price home). The median income should be more logically compared to the entry level home price. I know this is far from perfect but its more accurate then median income vs. median home price IMO.

[sdrealtor]

The other problem with using median income as a metric is what those with below median income are generally referred to as in many market. They are called renters. In most market, only a bit over 50% of households are homeowners. Logically the higher income folks tend to be the homeowners. While not perfect, it would be more accurate to use the middle of the upper 50% of households (i.e. the 75th percentile to compare to the median price home). The median income should be more logically compared to the entry level home price. I know this is far from perfect but its more accurate then median income vs. median home price IMO.

[pemeliza]

Thank you for clarifying this sdr. I like your version of 75th percentile buys an entry level home. So if the 75th percentile income is for argument sakes 75k then at 3x income the entry level house should be 225k. Can’t buy too much house for that in the better areas unless you get a major fixer but a condo should be no problem.

[pemeliza]

Thank you for clarifying this sdr. I like your version of 75th percentile buys an entry level home. So if the 75th percentile income is for argument sakes 75k then at 3x income the entry level house should be 225k. Can’t buy too much house for that in the better areas unless you get a major fixer but a condo should be no problem.

[pemeliza]

Thank you for clarifying this sdr. I like your version of 75th percentile buys an entry level home. So if the 75th percentile income is for argument sakes 75k then at 3x income the entry level house should be 225k. Can’t buy too much house for that in the better areas unless you get a major fixer but a condo should be no problem.

[pemeliza]

Thank you for clarifying this sdr. I like your version of 75th percentile buys an entry level home. So if the 75th percentile income is for argument sakes 75k then at 3x income the entry level house should be 225k. Can’t buy too much house for that in the better areas unless you get a major fixer but a condo should be no problem.

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