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Rich ToscanoKeymasterSorry, I was referring to the relationship to incomes/rents, per my usual charts… if comparing to inflation, it’s as you say.
Rich ToscanoKeymaster[quote=bewildering]No, it is not an all-time high.
$525,000 in 2017 dollars = $420,000 in 2005 dollars.
The author of this article would presumably be astounded that houses in La Jolla only cost $30,000 in 1955. Because anyone could afford $30,000.[/quote]
Nah the author gets it — he addressed the inflation thing within the article. That said I agree that the headline could do a better job of distinguishing real vs. nominal prices. But it’s tough to do that without getting jargony. (FWIW, I doubt the author picked the headline).
Anyway, this will lead to a new round of “is this a bubble”… time to update the valuation stuff I guess!
This is probably the most relevant stat: SD home prices would have to rise 40%, with no accompanying increase in rents or income, to reach bubble peak levels. Still quite a ways off from there! But, definitely getting spendy…
Rich ToscanoKeymasterHaha nextdoor… that’s where I found out about it too. There’s some useful info on there, in general, but it’s a little demoralizing to learn how whiny and/or nuts a lot of my neighbors are.
Good point on the upgrades, they clearly tricked out the models so they would be way more. How much, I don’t know. And as far as the selling… fwiw it when I was there this weekend, they were part sold out of phase 2 but most of the units are still to come up for sale.
Rich ToscanoKeymaster
Rich ToscanoKeymasterI don’t have inside info but I went today to look at them, just for giggles, since I live nearby. They are beautiful places imo — if you are a fan of open floorplans and “blurring” the boundary between inside and outside (which I am), they did a pretty amazing job.
It’s in a “modest” neighborhood, but that pricing actually seems pretty decent for what you get compared to Bay Park as a whole. (They are in Bay Ho but pretty close to the Bay Park border). I’m seeing all kinds of places coming on the market in this area for over $1 mil these days — most of them not as nice as the Tavara Ridge homes.
Anyway, the main reason I replied is that I can answer one thing: they aren’t all sold. They’re doing them in phases and there are still many places left unclaimed.
Rich ToscanoKeymasterThank you guys (including TG, who made a special visit back for this 😉 for the kind words. I’m really glad this little site helped some people out!
Rich ToscanoKeymaster[quote=sdgrrl]I remember real estate agents saying Rich and us were clueless.[/quote]
I remember this part very well… it wasn’t just real estate agents though! 🙂
I have some pretty comical hate mail from back in those days…
Rich ToscanoKeymasterSent you a pm.
Rich ToscanoKeymaster[quote=no_such_reality][quote=Rich Toscano][quote=no_such_reality]It does apply. 5X with around 4% loan equates out to a front end DTI of 40% on a $317 loan. So technically with no debt basically you’re tapped out to $317k plus down payment
Low down payment adds PMI.[/quote]
It doesn’t look like SD homes have EVER sold for 5x (median home vs. median hh income), even at their cheapest.
How can you say this rule of thumb applies in SD, when it’s never actually happened that way? I guess you can argue that it SHOULD apply, but that’s a whole different point from the one I was trying to make.[/quote]
I read it as a multiplier of affordability not a multiplier of what median should be. I.e. At current rates a person can by roughly 5x their in one. Previously at different t time depending on rates they said 3x or 4x
The OP said what people could afford is 5x. The next argue that median a have never been 5x and I pointed out that 5x still caps what a person can buy (with a loan). ( actually that’s all messed up several people between there). It was you saying it’s more and I agree it is. But that doesn’t change the the question of what can a income by and when could a median income buy a new SFR here
I give up trying to fix typos on this iPhone[/quote]
Gotcha…
Rich ToscanoKeymaster[quote=no_such_reality]It does apply. 5X with around 4% loan equates out to a front end DTI of 40% on a $317 loan. So technically with no debt basically you’re tapped out to $317k plus down payment
Low down payment adds PMI.[/quote]
It doesn’t look like SD homes have EVER sold for 5x (median home vs. median hh income), even at their cheapest.
How can you say this rule of thumb applies in SD, when it’s never actually happened that way? I guess you can argue that it SHOULD apply, but that’s a whole different point from the one I was trying to make.
Rich ToscanoKeymaster[quote=moneymaker]When was the last time an average household income in San Diego could afford a new SFH? Currently average HH income is $63,400 which if you use the 5 times income rule would translate into a house that sells for $317k. I know you can get a condo/mobilehome/RV for that but the question is when was the last time average person could afford a new SFH?
http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.aspx%5B/quote%5DThe 5x rule of thumb doesn’t really apply in SD, as it’s always been more expensive here. Doing a quick calculation, it looks like the typical historical multiplier is closer to about 7. (That is, the ratio of the median home price to median HH income).
As for when that last happened… between the end of 2008 and the beginning of 2013.
March 14, 2017 at 6:57 AM in reply to: Why it’s not a good time to buy a house in San Diego! #806011
Rich ToscanoKeymaster[quote=AN][quote=Rich Toscano]To put some perspective on it, go look at the BLS per capita income data, which is not inflation adjusted.
From 2010 to 2015, nominal per capita income increased by over 21%. (Per capita is different from median household, but in terms of growth rates they are extremely similar).
To argue that nominal incomes from 2010-2015 increased less than 2% (no_such_reality) or that they decreased (AN) is way off base.[/quote]Why can’t you have both flat median household income and increasing per capita income?[/quote]
Guys, thank you, I’m aware of the difference between the mean and the median, as hard as that seems to be for everyone to believe. (Really: you think I managed to have this website the whole time without knowing what means and medians are?)
The issue is that it defies all other data points, and common sense, to claim that from 2010-2015, San Diego median hh income was flat (or negative!) in nominal terms.
But that’s what’s being claimed here. And you are digging in and stubbornly defending this claim, based entirely on ambiguous wording on a single website, when a little further poking around would show that it’s wrong.
So as I said, I’m not going to spend any more time trying to change your mind. You can figure it out on your own, or just believe what you want.
March 13, 2017 at 9:58 PM in reply to: Why it’s not a good time to buy a house in San Diego! #806001
Rich ToscanoKeymaster[quote=no_such_reality][quote=Rich Toscano]
From 2010 to 2015, nominal per capita income increased by over 21%. (Per capita is different from median household, but in terms of growth rates they are extremely similar).To argue that nominal incomes from 2010-2015 increased less than 2% (no_such_reality) or that they decreased (AN) is way off base.[/quote]
Rich, you’re confusing Average (Mean) and Median.
Per Capita is average income per person. i.e. Total aggregate income divided by number of people.
Median is income is 547001st household making.[/quote]
Are you being serious right now?
OK, I’m done here… believe what you want to believe.
March 13, 2017 at 9:43 PM in reply to: Why it’s not a good time to buy a house in San Diego! #805995
Rich ToscanoKeymaster[quote=no_such_reality][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]
AN is correct, the income data sets clearly say that 2015 is in 2015 dollars and 2010 is in 2010 dollars. A 2010 dollar is worth 1.087 in 2015.
https://factfinder.census.gov/bkmk/table/1.0/en/ACS/10_5YR/DP03/0500000US06073%5B/quote%5D
You guys are confused about how the inflation adjustment works.
To put some perspective on it, go look at the BLS per capita income data, which is not inflation adjusted.
From 2010 to 2015, nominal per capita income increased by over 21%. (Per capita is different from median household, but in terms of growth rates they are extremely similar).
To argue that nominal incomes from 2010-2015 increased less than 2% (no_such_reality) or that they decreased (AN) is way off base.
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