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

To: Lizzie Tudor who wrote (69324)	12/24/2006 6:13:56 PM
From: Wyätt Gwyön	Respond to of 306849

Do you have a source for this, it sounds a little unbelieveable to me. isn't avg house around 600K and avg salary around 60K? maybe a little variation depending on the region--call it 8x income although i think LA is 10x. San Jose 70K salary and 600K house avg... ti.org People with $150K incomes are not getting $1.5 million dollar mortgages, they are just not. They might be buying $1.5mm houses, thats different. the 10x figure is just a crude average for the entire state--average income compared to average house price. but if you look at that average multiple across the land, or longitudinally compared to the past relationship in, e.g., San Jose, the multiple is much higher now. also of interest at the above link: The National Association of Realtors says that the highest home prices in America are found in the San Francisco Bay Area, including San Jose. While the median price of homes nationwide was $184,000 in 2004, the median Bay Area home sold for more than $640,000. The Bay Area market is so hot that most homes sell for more, not less, than the price for which they are offered on the market. One weakness in sale price data is that it does not account for differences in home size and quality in various regions. Coldwell Banker provides a bit more detail as it annually estimates the value of a standard "middle-manager" home: four bedrooms, two baths, two-car garage, 2,200-square feet, one fireplace, etc., in more than 300 cities. According to the realtor's latest report, such a home in San Jose currently sells for around $950,000. This is an unrealistic 50-percent jump from Coldwell Banker's 2003 price of $620,000. Yet it may not be too far off, as real estate listings on Realtor.com indicate the median-priced four-bedroom, two-bath home on the market in San Jose today is being offered for $800,000.