[DoJC]

Here are a few more excerpts, with links this time, to show ratios of up to 10:1 exist in various parts of CA:

#24 “My dad made money on his house, and it will work for me too.”
FALSE. Your dad bought his house when houses were cheap compared to salaries, maybe 3 or 4 times annual salaries. Go ask him. Things are different now. Here is a chart of median house price vs median income in Palo Alto:

Year Median House Price Median Income Multiple
1980 148900 24743 6.0
1990 457800 55333 8.3
2000 910000 90377 10.0

Most bankers use a multiple of 3 as a “safe” price to income ratio. We are well beyond the danger zone, into the twilight zone. Another rule of thumb is that a fair house price is between 100 and 200 times the monthly rent. If a house rents for $2000 per month, then a fair price is from $200,000 to $400,000.

http://www-formal.stanford.edu/selene/housing-bubble.html

http://i152.photobucket.com/albums/s166/servinginecuador/RiversidePricetoIncome.jpg

from: http://housing-kaboom.blogspot.com/2007_09_01_archive.html

There are more, but this is a good start to show that we have been a bit higher than 4:1 on price to income charts for CA.

– Doug

[DoJC]

Here are a few more excerpts, with links this time, to show ratios of up to 10:1 exist in various parts of CA:

#24 “My dad made money on his house, and it will work for me too.”
FALSE. Your dad bought his house when houses were cheap compared to salaries, maybe 3 or 4 times annual salaries. Go ask him. Things are different now. Here is a chart of median house price vs median income in Palo Alto:

Year Median House Price Median Income Multiple
1980 148900 24743 6.0
1990 457800 55333 8.3
2000 910000 90377 10.0

Most bankers use a multiple of 3 as a “safe” price to income ratio. We are well beyond the danger zone, into the twilight zone. Another rule of thumb is that a fair house price is between 100 and 200 times the monthly rent. If a house rents for $2000 per month, then a fair price is from $200,000 to $400,000.

http://www-formal.stanford.edu/selene/housing-bubble.html

http://i152.photobucket.com/albums/s166/servinginecuador/RiversidePricetoIncome.jpg

from: http://housing-kaboom.blogspot.com/2007_09_01_archive.html

There are more, but this is a good start to show that we have been a bit higher than 4:1 on price to income charts for CA.

– Doug

[DoJC]

Here are a few more excerpts, with links this time, to show ratios of up to 10:1 exist in various parts of CA:

#24 “My dad made money on his house, and it will work for me too.”
FALSE. Your dad bought his house when houses were cheap compared to salaries, maybe 3 or 4 times annual salaries. Go ask him. Things are different now. Here is a chart of median house price vs median income in Palo Alto:

Year Median House Price Median Income Multiple
1980 148900 24743 6.0
1990 457800 55333 8.3
2000 910000 90377 10.0

Most bankers use a multiple of 3 as a “safe” price to income ratio. We are well beyond the danger zone, into the twilight zone. Another rule of thumb is that a fair house price is between 100 and 200 times the monthly rent. If a house rents for $2000 per month, then a fair price is from $200,000 to $400,000.

http://www-formal.stanford.edu/selene/housing-bubble.html

http://i152.photobucket.com/albums/s166/servinginecuador/RiversidePricetoIncome.jpg

from: http://housing-kaboom.blogspot.com/2007_09_01_archive.html

There are more, but this is a good start to show that we have been a bit higher than 4:1 on price to income charts for CA.

– Doug

[DoJC]

Here are a few more excerpts, with links this time, to show ratios of up to 10:1 exist in various parts of CA:

#24 “My dad made money on his house, and it will work for me too.”
FALSE. Your dad bought his house when houses were cheap compared to salaries, maybe 3 or 4 times annual salaries. Go ask him. Things are different now. Here is a chart of median house price vs median income in Palo Alto:

Year Median House Price Median Income Multiple
1980 148900 24743 6.0
1990 457800 55333 8.3
2000 910000 90377 10.0

Most bankers use a multiple of 3 as a “safe” price to income ratio. We are well beyond the danger zone, into the twilight zone. Another rule of thumb is that a fair house price is between 100 and 200 times the monthly rent. If a house rents for $2000 per month, then a fair price is from $200,000 to $400,000.

http://www-formal.stanford.edu/selene/housing-bubble.html

http://i152.photobucket.com/albums/s166/servinginecuador/RiversidePricetoIncome.jpg

from: http://housing-kaboom.blogspot.com/2007_09_01_archive.html

There are more, but this is a good start to show that we have been a bit higher than 4:1 on price to income charts for CA.

– Doug

[DoJC]

Here are a few more excerpts, with links this time, to show ratios of up to 10:1 exist in various parts of CA:

#24 “My dad made money on his house, and it will work for me too.”
FALSE. Your dad bought his house when houses were cheap compared to salaries, maybe 3 or 4 times annual salaries. Go ask him. Things are different now. Here is a chart of median house price vs median income in Palo Alto:

Year Median House Price Median Income Multiple
1980 148900 24743 6.0
1990 457800 55333 8.3
2000 910000 90377 10.0

Most bankers use a multiple of 3 as a “safe” price to income ratio. We are well beyond the danger zone, into the twilight zone. Another rule of thumb is that a fair house price is between 100 and 200 times the monthly rent. If a house rents for $2000 per month, then a fair price is from $200,000 to $400,000.

http://www-formal.stanford.edu/selene/housing-bubble.html

http://i152.photobucket.com/albums/s166/servinginecuador/RiversidePricetoIncome.jpg

from: http://housing-kaboom.blogspot.com/2007_09_01_archive.html

There are more, but this is a good start to show that we have been a bit higher than 4:1 on price to income charts for CA.

– Doug

[DoJC]

http://i152.photobucket.com/albums/s166/servinginecuador/CAPrice-to-Income.jpg
– Doug

[DoJC]

http://i152.photobucket.com/albums/s166/servinginecuador/CAPrice-to-Income.jpg
– Doug

[DoJC]

http://i152.photobucket.com/albums/s166/servinginecuador/CAPrice-to-Income.jpg
– Doug

[DoJC]

http://i152.photobucket.com/albums/s166/servinginecuador/CAPrice-to-Income.jpg
– Doug

[DoJC]

http://i152.photobucket.com/albums/s166/servinginecuador/CAPrice-to-Income.jpg
– Doug

[DoJC]

…allow judges to cut interest rates and reduce what’s owed on troubled borrowers’ mortgages.”

Wow, let’s take the banks and borrowers out of the equation and let judges step in and bail someone out of a situation they never should have been involved in in the first place. Man, what’s next? Can I find a sympathetic judge to make my payments for me too?

– Doug

[DoJC]

…allow judges to cut interest rates and reduce what’s owed on troubled borrowers’ mortgages.”

Wow, let’s take the banks and borrowers out of the equation and let judges step in and bail someone out of a situation they never should have been involved in in the first place. Man, what’s next? Can I find a sympathetic judge to make my payments for me too?

– Doug

[DoJC]

…allow judges to cut interest rates and reduce what’s owed on troubled borrowers’ mortgages.”

Wow, let’s take the banks and borrowers out of the equation and let judges step in and bail someone out of a situation they never should have been involved in in the first place. Man, what’s next? Can I find a sympathetic judge to make my payments for me too?

– Doug

[DoJC]

…allow judges to cut interest rates and reduce what’s owed on troubled borrowers’ mortgages.”

Wow, let’s take the banks and borrowers out of the equation and let judges step in and bail someone out of a situation they never should have been involved in in the first place. Man, what’s next? Can I find a sympathetic judge to make my payments for me too?

– Doug

[DoJC]

…allow judges to cut interest rates and reduce what’s owed on troubled borrowers’ mortgages.”

Wow, let’s take the banks and borrowers out of the equation and let judges step in and bail someone out of a situation they never should have been involved in in the first place. Man, what’s next? Can I find a sympathetic judge to make my payments for me too?

– Doug

[Author]

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