Friday, March 16, 2007

Median Price/Earnings

Okay, you saw it here first. I decided to do some nosing around, and I think that I have done something reasonably credible. I did it on a national basis. I'm pretty confident that you would find much wilder swings. I'm not a statistician, nor do I play on on TV, but I think this supports my point.

Bottom Line: To maintain the same median income to median home price in 2006 from 2000, the median household income would have to be ~40% higher. The household would have to be earning $67K v. $48K.
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P. S: 4.49 p.m. The actual median price of a home discussed in the news is about ~230K. I'm not sure why there is a difference between how I calculated and/or applied the index. Suffice, to say, though, the point still sticks if not more conservatively stated here.

2 comments:

moab said...

Leisa -

Excellent analysis. I think consumers are going deep into debt to maintain their lifestyle. This analysis adds weight to that argument. At some point there debts will overcome them. And with the new bankruptcy laws people will be servicing these debts for eternity.

I am glad you have a blog now. I will be reading it regularly. I started a blog recently because I found that writing my thoughts down clarifies them a great deal.

Cheers.

Leisa said...

moab--thanks for visiting and for commenting. I have added you to my list and I visited your wonderful blog today (and will be a frequent visitor).