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

To: John Vosilla who wrote (69375)	12/26/2006 10:45:01 AM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 306849

yeah, the reality is that Bay Area salaries account for only 15% of the premium over a place like Austin. but houses sell for 5x the price. so people in SV who don't know what they're talking about fantasize that their wages are actually 3-5x as high as in Austin, LOL. if wages were 3-5x as high, as per the SV fantasies, then 2br apartments in SV would rent for 10 grand a month. in fact the rental prices are not far off Austin, and much more closely reflect the very small wage differential. Folks don't buy overpriced property in Austin cause they think they'll make a killing from appreciation.. Austin has a much more linear appreciation trend than one sees in California. in CA you have cyclical markets, so the YoY appreciation tends to be either WAY above trend (big gains) or WAY below (losses). by contrast, in a non-bubble market, the deviation from trend growth tends to be very small from one year to the next. this study of different market types done by Christopher Cagan shows the difference between linear and cyrlical markets. click "The Real Estate Market in 2006" on firstamres.com