Quote from peilthetraveler:
I'm in Northern CA and there are plenty of houses here that 1 yr salary will cover the entire cost. The question is...would you really want to live there?
There are plenty of other places where you can pick up a house for dirt cheap. You can get alot of houses in detriot for 1k. But do you really expect to buy an average house for 1 year salary in the rest of the country? If you do, you will never own a house.
In 1930 the average brand new home cost $7,150. Average income was $1,970. Income/house ratio 3.62
1940 new house was $3,920 and income was $1,725 Income/house ratio 2.27
1950 new house $8,450 and income was $3,210. Income/house ratio 2.63
1960 new house $12,700 and income was $5,315 Income/house ratio 2.38
1970 new house $23,400 and income was $9,350 Income/house ratio 2.50
1980 new house $68,700 and income was $19,170 Income/house ratio 3.58
1990 new house $123,000 and income was $28,970 Income/house ratio 4.24
2000 new house $134,150 and income $40,343 Income house ratio 3.32
If my number are right for today(and I'm doing these numbers from memory) average home price is 178k and average income is 49k which gives a income/house ratio of 3.63.
Could we go lower? Sure, its possible, but not much lower. If we go back to the gold standard then we will see houses go back to the 2-2.50 ratio range. We will never go 1 to 1 ratio though.
Housing is pretty close to the bottom. The numbers above prove it Since we have been off the gold standard, you can see the average person is willing to pay between a ratio of 3 to 4 for a house (higher in boom times)
