I got a lot of pushback when I wrote last month that San Diego home prices were, on the whole, back in line with their historical relationships with local incomes and rents. One of the more frequent counterpoints was the claim that while home prices might be in line with rents, rents themselves had become unsustainably high.
How to analyze such a question? My first thought was to compare how much rents had changed in comparison to local incomes. An increase in rents that was way out of line with what San Diegans were earning would suggest the rent prices had indeed become distorted by the housing bubble.
But the data I have indicates that this is not the case. The accompanying graph charts average San Diego rent as a percent of income per person. The average percentage over the entire measurement period is illustrated by the orange line.