(Click on the image for a larger view.)This ratio (price/income) is basically a measure of housing affordability in Marin; the larger the ratio, the less affordable.
Just for fun... given the mean income of the average Marin resident as of 2004 (the last year for which I have complete data), how far would house prices need to fall so as to achieve maximum affordability based on the historical trend line for Marin (the red line)? Well, the calculated price/income ratio of roughly 13.1 for 2004 corresponds to a projected maximum affordability ratio of about 9.25 on that red line. To achieve that point the average house price in Marin would have to drop by approximately 30%.
Just for fun... given the mean income of the average Marin resident as of 2004 (the last year for which I have complete data), how far would house prices need to fall so as to achieve maximum affordability based on the historical trend line for Marin (the red line)? Well, the calculated price/income ratio of roughly 13.1 for 2004 corresponds to a projected maximum affordability ratio of about 9.25 on that red line. To achieve that point the average house price in Marin would have to drop by approximately 30%.
8 comments:
Since it is a ratio, should it be already adjusted for inflation?
Oh yeah (blush).
Excellent graph. I lack good local data on incomes, so I can't really do anything similar for Vancouver.
I got my data from the US Census Bureau. Is there no analogous organization for you?
Cool graph.
what is the link for the data you used from the US Census Bureau? I can't seem to find it.
First of all, great site, love the analysis. However, it is mortgage payments, not prices, that dicate the affordability in a given market. What would be more indicative is factoring in interest rates and their influence on this ratio. For instance, my number crunching tells me that from 2001-2003, affordability actually improved as prices went up (slowly, mid single digits) and rates fell from the mid 7s to the mid 5s. How about a payment/income graph?
Good work done. I am certain it must have involved a lot of hard work in it.
Highest CD Rates
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