Moodys Says Home Prices Should Bottom Around 3.7 times the Yearly Gross Income (i.e. 50% Drop from the Top)

Posted: April 30, 2008 in Your Shelter
Tags: ,

” The problem is many of the markets that experienced steep 2007 price drops are still a long way from recovery. … Between 1980 and 2000, home values consistently ran 3.7 times the median family’s income in San Bernardino-Riverside, but by 2006 that figure swelled to a multiple of 7.6.”

My 2-Bits: According to StatsCan Vancouver’s 2004 Median Family Income was 56,200. Let’s bump that up to $60K for today, and by applying the Moody’s 3.7 ratio we get $222,000. RealtyLink’s Greater Vancouver’s Average Home in March 2008 rang in at $564.979. Assuming last month to be the top, then according to the Moody Model the average house price should see a drop from the top in the Vancouver area by about 60%.

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