More on San Diego Housing Prices

Think home-price slide is over? The worst appears yet to come

UNION-TRIBUNE
November 4, 2007

After more than a year's worth of the Great American Mortgage Crisis, some real estate professionals still think the law of supply and demand will kick in to prevent home prices in San Diego from dropping too low.

But people often forget that the economic concept of “demand” also includes “ability” – i.e., ability to pay. As lenders tighten their standards on mortgages – standards that never should have gotten as lax as they were in the past few years – fewer San Diegans will have the ability to buy homes at their current prices.

The median family income in San Diego County is $69,400, according to the latest data from the U.S. Department of Housing and Urban Development. That puts us slightly below the median family income of $73,700 in Madison, Wis.; $71,400 in Denver; $72,600 in Norwich, Conn.; or $72,800 in Worcester, Mass. – to cite some examples from HUD's database.

Although we make less money than the people in those cities, we pay more than twice as much for our housing.

In San Diego, the median sale price of an existing single-family home in the second quarter was $614,000, according to the National Association of Realtors. Compare that with $223,500 in Madison, $255,200 in Denver, $276,600 in Norwich and $278,900 in Worcester.

According to the Census Bureau, we are the 42nd-most-expensive county in the nation for median housing costs for owner-occupied units. But we are 142nd on the list of highest-paying metropolitan areas.

http://www.signonsandiego.com/news/business/calbreath/20071104-9999-1b4dean.html