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CA renter
14 years ago

You’re awesome, Rich! πŸ™‚

You’re awesome, Rich! πŸ™‚

I noticed on your first two graphs that they are “rebased to Dec 07 median.” Are you referring to the wages and rents? If so, might it be relevant that wages and rents have been falling since then?

Not sure if it means anything, or if the declines in rent and/or wages are significant enough to change things materially.

CA renter
14 years ago
Reply to  Rich Toscano

Got it. Thanks so much for
Got it. Thanks so much for putting this together, as always. πŸ™‚

14 years ago
Reply to  CA renter

Yes excellent stuff. Makes me
Yes excellent stuff. Makes me feel like a genius for closing in Feb 09. Doubt if you remember me asking you years ago if you thought there would ever be a time when a mortgage payment would ever be less than rent, but I think it happened in early 09. Now if I was flush with cash I would definitely wait for rates to rise before “investing” in real estate. I think cash investors would still be better off waiting.

14 years ago
Reply to  moneymaker

honestly it seems like San
honestly it seems like San Diego is just bouncing off the bottom of a bubble.

Price to income is 8?

In the long term that’s utterly unsustainable.

It works because americans are working 2 jobs,
or their spouses are fully employed.

That is unsustainable. If you assume any level of unemployment going forward, you will see jobs per houshold drop….

Reply to  Rich Toscano

I think perhaps patb is
I think perhaps patb is relating the price to income ratio to what an individual or couple might qualify to purchase based on their income.

There has been a common misconception that somehow the aggregate price to per capita income has to be in the 3-4 range to be sustainable. People relate what one could qualify for for a certian income (e.g. 4x their income) to these ratios.

This is flawed for a number of reasons that we have discussed on this board over the years, here’s one …

Per capita income includes high school kids and other non- or part-time workers. Per the Census Bureau “Per capita income is the mean money income received in 1999 computed for every man, woman, and child in a geographic area. It is derived by dividing the total income of all people 15 years old and over in a geographic area by the total population in that area. “

SD Realtor
14 years ago

The fact of the matter is
The fact of the matter is that fo San Diego P2I of 8 is utterly sustainable. The quantity of high paying jobs in San Diego is quite high. The region is flush with engineering, biotech, a large university and state college, as well a diverse job base of legal, business, accounting and other professional jobs. We did not even talk about the military jobs. It is well documented on this board that San Diego has always had a higher P2I ratio and always will. Those who feel it will come down to 4 or 5 will be waiting forever.

I do believe that when the bond market dislocates prices will drop substantially.