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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: fatty who wrote (8811)	2/10/2003 4:53:10 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

is real estate more affordable now that in 1930? The long term parity between income and real estate prices implies that, apart from short term divergences, real estate is always as affordable now as it was during any other time. As Skeeter Bug correctly points out, it now requires two wage earners to earn a family wage. So a home is just as affordable today for a two income family as it was for a one income family in 1930. Remember we are comparing GDP (national income) to real estate prices, not average salary with real estate prices. If you passed a law limiting wage earners to one per family, home prices would adjust and would once again be just as affordable for a one income family as they were in 1930. This is the magic of real estate's role in the economy as a "store of wealth". Real estate's value is entirely dependent on the income (wealth) available. Programs to make real estate "affordable" in the long run accomplish nothing.