Median Incomes vs. Price of Housing

[jficquette]

Quote from Zhang Fei:

Median Household income in 1975 was $11,787. The $50,000 price you quoted was just over 4x median household income in 1975. The price it sold for, $400,000, is over 9x the current $43,000 median household income. And this is for a used home (saying "existing" home is like saying "pre-owned" car - it's just awkward). My feeling is that property prices could collapse by 50% and still not hit bottom.

Japan's property market went down every year for 14 years. I remember reading last year about how Japan's property market had registered its smallest drop in 14 years - a mere 5% decline. I don't know how severe the stateside decline will be, but I expect a lot of buyers in the 2002-2005 time frame to be upside down to the tune of hundreds of thousands of dollars each by the time this is over.

Japan didn't have 500 thousand illegal immigrants pouring into their country shoring up rentals and buying entry level housing like the US does.

Japan's real estate was all internal speculation. While the US market has been highly speculative there is also a demand component to it that Japan did not/does not have.

People complain about illegals but we need immigration to pay for the baby boomers who are probably going to live way longer then the mortality tables say. I would guess most anyone 55 now will live to 100.

John