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privatecash
1760 Posts |
 Posted - 02/13/2008 : 2:31:59 PM
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Median home prices in California peaked in 2006 at 13.3 times per capita incomes. Hard to believe, but true. They may be down now to about 11.1 times.
But that's still way above the ground. Throughout most of the '80s and '90s they ranged between six and seven times incomes.
Just to get down to seven times incomes, prices would have to fall 37% tomorrow.
-From Karl Case, economics professor at Wellesley College. (He is one half of the duo behind the closely-watched Case-Schiller real estate index).
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NegAm
562 Posts |
Posted - 02/13/2008 : 2:44:14 PM
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If you wanna see what California values should be in comparison to income, take a look at Texas.
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broker949
217 Posts |
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homebroker@sbcgl
3551 Posts |
Posted - 02/13/2008 : 3:02:14 PM
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| This is very true, I would think it is reasonable to expect much further declines in California. |
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privatecash
1760 Posts |
Posted - 02/13/2008 : 3:30:53 PM
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| Amazing graph! I wonder how much is driven by the CA market? |
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broker949
217 Posts |
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AndrewSoss
359 Posts |
Posted - 02/13/2008 : 4:45:22 PM
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quote:
Originally posted by broker949
Here's a graph based on Schiller's work. Pretty crazy
http://img135.imageshack.us/my.php?image=chart10lgas3.gif
not that I necessarily disagree with his premise...that graph is a classic misrepresentation. Take a look at where the bottom numbers start on the graph (hint: it's not zero). That makes the upswing look a lot larger graphically than it actaully is. |
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broker949
217 Posts |
Posted - 02/13/2008 : 4:53:33 PM
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quote:
Originally posted by AndrewSoss
quote:
Originally posted by broker949
Here's a graph based on Schiller's work. Pretty crazy
http://img135.imageshack.us/my.php?image=chart10lgas3.gif
not that I necessarily disagree with his premise...that graph is a classic misrepresentation. Take a look at where the bottom numbers start on the graph (hint: it's not zero). That makes the upswing look a lot larger graphically than it actaully is.
Huh?? He used and started with 100 as the benchmark, meaning $100k Median home price. Have you seen many homes that cost zero? |
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johnhoefer
429 Posts |
Posted - 02/13/2008 : 5:10:46 PM
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| Andrew, if you look at the graph assuming 100 as the zero point, with below 100 being below the benchmark and above 100 as above the benchmark, it represents itself just fine. |
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Xpatriot
333 Posts |
Posted - 02/13/2008 : 5:41:51 PM
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| if i only knew what i know now in 2000... |
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privatecash
1760 Posts |
Posted - 02/13/2008 : 6:03:07 PM
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From The Orange County Register today:
• Economist Chris Thornberg at Beacon Economics: “UCLA recently reported they expected prices to bottom out in mid-’08. UCSB claims the economy is just fine, outside of construction. This is definitive proof to me that California’s medical marijuana laws are clearly being abused.”
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broker949
217 Posts |
Posted - 02/13/2008 : 6:19:47 PM
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| Reminds me of all the pinheads about a year ago saying that this would be a soft landing, remember all that talk? Since then, here in the OC foreclosures have increased 424% from a year ago. |
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homebroker@sbcgl
3551 Posts |
Posted - 02/13/2008 : 8:55:19 PM
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| The market has a way to go, Irvine has an average price of $580,000 with incomes around $78,000 year household. In Collyville TX an exclusive area, the average income is $155,000 year and the average home price at $415,000 about 3x income as it should be, hold in CA it not earthquakes we will be worry about for a while. All the grape pickers in their $800,000 Mc Mansions will have to face reality and move down a little, say 1 bedroom apartment. |
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AndrewSoss
359 Posts |
Posted - 02/13/2008 : 10:36:06 PM
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quote:
Originally posted by johnhoefer
Andrew, if you look at the graph assuming 100 as the zero point, with below 100 being below the benchmark and above 100 as above the benchmark, it represents itself just fine.
yeah...nevermind. graph is fine. I wasn't looking at it right. |
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