Last login: Wednesday, June 19, 2013
I am a little skeptical about using the median Price/household income ratio to indicate normalcy in the market. One thing this stat doesn't capture is the quality of the inventory. I can't comment on the quality of inventory during a normal San Diego period of real-estate because I wasn't in the market then, but now I see a lot of ~600-1000sqft 2/1 houses(centrally located but with some in slightly questionable areas) going for 400K-500K depending on which part of the zip. These seem out of wack in light of comparable rent situations in the same neighborhoods even when you take into account the tax write-offs of owning. When evaluating a bubble I would like to see more emphasis on the value proposition of owning vs renting and how much speculation there is on the part of the buyer for what future prices are going to be. From a macro level it may not appear that we are in an abnormal market but if the inventory that is driving the median is coming from the bottom quartile of quality then in essence the true population median or previous benchmark is now being hidden. Would like to see some attempt to normalize inventory across at least square-footage and zip-code. Would love to see a quality metric comparing 2001-2005 with the last two years.
June 19, 2013 at 11:03 p.m.
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