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Originally Posted by pepper24
By apples to apples, I meant that the stats for comparing the historical 3-4 times to the current 4-11 levels are using the same method to compare. I agree that the super rich could be a reason why the variance is so wide (4-11 times) compared to the small range of the historical 3-4 times. The stats might be skewed in terms of the variance but are still correct in showing that housing "prices" compared to income are more expensive than historicals.
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"price ranges" Which basically means squat due to the easy skewing.
Quote:
Also, from the report........
The report says that on average, inflation-adjusted house prices in these cities have historically held stable at between $150,000 and $220,000 in today's dollars but current housing prices in all six major cities are now over $300,000 on average.
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Now we're getting somewhere relevant. Obviously prices are higher now than historical averages, that's not newsworthy.
What should be compared is the historical ratio of median income vs median home prices and current ratio of the same. This would eliminate the skewing caused by the super expensive homes of the super wealthy.
I don't doubt that the ratio will be less affordable now than historically, but it would be a lot closer than the way that article tried to twist it by throwing in the high number 11. Maybe something like 3X historical, and 4-5X current.
Likely too close for them to strongly use it to back up their "bubble" angle, which is why they went with the wrong comparison in the first place.