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

To: Les H who wrote (143654)	8/30/2008 12:48:18 PM
From: Les H	Read Replies (2) \| Respond to of 306849

Home Prices Making Their Way to Normalcy that we've gotten Case-Shiller home price data for the first half of 2008, let's check back in on the long view of how home prices stack up with their underlying fundamentals: local incomes and rents. As of the last update to these charts, which included data through December 2007, San Diego home prices -- despite having dropped substantially -- were still higher in proprtion to rents and incomes than they had been at either of the two prior bubble peaks. That is no longer the case. At least, not with the home price-to-income ratio, which has now dropped below prior peak levels and could as a result be considered within the bounds historical normalcy (though admittedly very close to the upper bound). As of June 2008, by the measurement approach described in the above chart, the ratio of home prices to area incomes had dropped 39 percent from the peak was back to a level last seen in January of 2002. In order to reach to the low point seen during the last housing bust -- and I'm not saying that's necessarily going to happen -- the price-to-income ratio would have to drop a further 25 percent from here. ... voiceofsandiego.org