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[quote=millennial]I think NSR had 8.7% increase and AN said that inflation adjusted medians decreased[/quote]8.7% is the inflation rate over the 5 years between 2010 to 2015. $63069 * 1.087 = $68556.

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[quote=millennial]It really could be as simple as people just making more money due to raises, inflation, or investment income.[/quote]Inflation isn’t huge over just 5 years time frame. As for the rest, does it really how more households are making their money? As long as they make more money, I think that’s all that matters.

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[quote=Rich Toscano][quote=AN][quote=Rich Toscano]No, I don’t think the census got it wrong, but you are confusing inflation-adjusted figures for nominal ones.[/quote]Nominal median income in 2010 was $63069, inflation adjusted based on BLS would be $68,553.15 in 2015 $. Median income in 2015 was $64309. Which mean adjusted for inflation, the median income decreased by 6.19%. All the while, the population making >$150k has increased.[/quote]

You’re doing the inflation adjustment backwards. Median income increased by the difference between 63069 and 64309, plus what inflation was over that period.[/quote]
https://www.bls.gov/data/inflation_calculator.htm
Here’s what I used to find out what what inflation adjust $ would be. I have to adjust the number for inflation first before I compare the number. You don’t want to compare the number, and then adjust for inflation. $63069 in 2010 $ is not less than $64309 in 2015 $ when you adjust for inflation.

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[quote=Rich Toscano]No, I don’t think the census got it wrong, but you are confusing inflation-adjusted figures for nominal ones.[/quote]Nominal median income in 2010 was $63069, inflation adjusted based on BLS would be $68,553.15 in 2015 $. Median income in 2015 was $64309. Which mean adjusted for inflation, the median income decreased by 6.19%. All the while, the population making >$150k has increased.

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[quote=millennial]It’s called data mining and selection bias to try and prove a point. To which I am not sure of. So bifurcation is creating home values to go up? Why did you choose San Diego county as a whole? Why did you choose 2010? Is it cause it served some purpose comparing a time soon after the collapse? Why did you choose households greater than $200k?[/quote]Not everyone need to be able to afford to buy a house. You just need the population who can afford to buy here to grow. Hence the $150-199k and >$200k group. You can look up data for your own sub area if you want. I looked up mine and it reflect similar to SD county numbers. My area have no new housing, so no new household addition. Just long time owners being replaced by newer more affluent owners. $100-149k group went from 22.1% to 25.7% of the area, $150-199k group went from 9.6% to 10% of the area, and >$200k group went from 4.5% to 5.5% of the area. When you have more affluent people moving in, they tend to push the the price.

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[quote=no_such_reality][quote=Rich Toscano][quote=no_such_reality]
From 2010 – 2015, detached housing in San Diego county grew by just over 8800 units.

In that same period, households in San Deigo county making more than $200K/yr grew by 15,400 households. Household making $150K-$199k grew by 8900 households.

During that period median income was essentially flat moving from $63K to $64K.
[/quote]

There’s no way those income numbers are right.[/quote]

So you think the census screwed it up? https://factfinder.census.gov/bkmk/table/1.0/en/ACS/15_5YR/S1901/0500000US06073

2015, 7.4% of households are over $200K in San Diego County. Up from 6.2% in 2010.

If you prefer raw numbers https://factfinder.census.gov/bkmk/table/1.0/en/ACS/15_5YR/DP03/0500000US06073%5B/quote%5DTalk about demographic shift. That’s pretty staggering after just 5 years. Those two income group went from 12.9% to 14.7% of SD’s population. Not to mention that SD’s population grew over that period of time as well. If this continues, thing will get pretty crazy.

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[quote=SD Realtor]I do agree with your point rich that low rates don’t justify insane valuations. However those who are locked into those low rates from purchases made in the past 10 years (IMO) will be able to weather any storm caused by depreciation. [/quote]I don’t think anyone is saying that low interest rate justify insane valuations. However, when P+I is equal or less than comparable rent, would you consider that insane valuation? Especially if you buy with a 30 years fixed? I’m sure if you bought in early 70s and see price tripled by early 80s, you’d think that’s insane as well. All the while, interest rates were rising as well. But yet, price never came back to yearly 70s price. So, just because valuation increased does not make it insane. Especially if rent and income rises as well.

Today is a very unique situation. Valuation is at the high point compare to recent history. However, it’s also at a low point when compare to income and rent. So, I contend that since majority in CA buy with a mortgage, monthly payment is more important than valuation. I viewed P+I vs rent as a much more important barometer for bubble than valuation.

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gzz, I don’t believe we’ll see a sub 1% long term rate. I agree with Rich on this point. However, Rich have made a case that price doesn’t move inversely with rate. I totally agree with that as well, since data proves it, so just because we have rising rate doesn’t mean we’ll have a decline/crash in price. I predict that rate and price will go up as well as inflation. If he gets through the minimum $125k for H1-B, that will definitely push up income for tech workers, which is a major buying population in CA. On top of that, CA minimum wage keeps on going up, so I don’t see how demand won’t keep on increasing.

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[quote=millennial][quote=AN]As long as they’re still living here, then they can only drive rental price up, not down.[/quote]
What if no one can afford to buy higher rental apartments due to wages not increasing?[/quote]
Then they would move out of SD or become homeless. If they’re here, then they won’t be driving down rent.

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As long as they’re still living here, then they can only drive rental price up, not down.

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[quote=spdrun]A significant % of SD County’s population is very worried right about now…[/quote]A significant % of SD County’s population can’t afford to buy here, so why does that even matter? In several zip codes, we have < 1 month of supply and anything house that isn't run down, on/back a busy street, and isn't way overpriced flies off the market pretty quickly. So, your assumption is totally off here. [quote=spdrun]Question is, will the left side of the aisle do everything in its power to provoke chaos before the 2018 and 2020 elections? It's telling that Yellen (Obama appointee) is yipping about raising rates, even with crummy growth estimates for Q1-17: http://seekingalpha.com/article/4053152-u-s-economic-growth-slowing-q1%5B/quote%5DFor the sake of the nation, I hope that a fed chair isn't a political hack. I would assume she has more integrity than you and won't bring down a global economy just because she doesn't like the sitting president.

[quote=spdrun]A recession might be seen as "less damage" than GOP being successful.[/quote]Only if you're a total nut job.

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gzz, I totally agree. I believe the monthly payment vs rent is much more important than price. I had this debate with Rich in the past, so there’s no point rehashing it. We’ll see soon enough whether it’s price or payment that matter more and which will mean revert first.

With all of the talk about protectionism, $1T of infrastructure spending, lower taxes, tax holiday for corporation, etc. I personally think we’ll see higher inflation and higher interest ahead.

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Just because rate goes up does not mean price have to come down. Just look at what happen to the 70s/80s when rate increases and stayed high for a long time. Specifically early 70s to early 80s, price went up like crazy. Rate doesn’t increase in a vacuum. If rate goes to 7%+, most likely, we’ll also have robust employment and wage growth. I don’t know what will happen here on out, but my guess is, the probability of us seeing another bubble pop like 2005 is as likely as we seeing big inflation happen like the 70s. Those are the two extremes. I predict we’ll probably see flatten prices for awhile and wage and inflation increase and we’ll be back to historical average valuation again.

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[quote=no_such_reality]We as a people want Caesar’s Bacchanal Buffet, but we want to pay the Port O’ Call price.[/quote]Way over priced for mediocre food. Perfect analogy though. I would much rather eat at Mon Ami Gabi. Much much better food and is cheaper.

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[quote=flu][quote=AN]Make my net worth great again. LoL[/quote]

Hey, you stole that from me. It’s patented.[/quote]You can fight Trump for that one 😉

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