jimbomo

Declines from Peaks in Housing Show Big Disparity

Nearly every article on housing misses the point. Houses are not worth more that 2.5 to 3 times household income. They are primarily shelter for their owners - not retirement investments or inflation hedges. It doesn't make any difference how far prices go down until we reach this 2.5 - 3 x figure.

I lived in San Diego during 2007 and noticed that houses in the neighborhood where I rented were selling for around $600K. I can guarantee that very few if any of those households had incomes of $200K + per year.