Who is buying overpriced RBA real estate in Mountain View, Sunnyvale and Palo Al
2011 Oct 9, 3:38am 18,494 views 54 comments
by SJ follow (0)
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house price to income ratio is a academic ratio and has no value beyond
So like any other financial ratio, has no value ? What is risk and how do you measure low-hi risk and return.
house price to income ratio is a academic ratio and has no value beyond
So like any other financial ratio, has no value ? What is risk and how do you measure low-hi risk and return.
To put things in perspective, consider the following two statements:
1. the shortest distance between any two points is a straight line.
and
2. median house prices can only be 3 times the median income.
Point 1 above is a law of nature. If you break it, the universe won't exist, i.e its always true in the absolute sense, you can't tweak it, you can't bend it, you can't reinterpret it.
Point 2 above is probably based on a statistical model that some lowly accountant came up with sitting in his lonely office back in the 70s thinking why his girlfriend ditched him for that dancer. In other words, point 2 can be changed, tweaked, stretched, condensed, bend, reinterpreted, and be open to all sorts of subjective assessments without bringing an end to the universe.
So I won't loose too much sleep if I don't see median house prices at 3 times median income. However, if you have two points between which the shortest distance is not a straight line, let me know ASAP, before the universe ends and I loose my sleep :-)
Hope this makes sense.
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I am baffled as to who would pay 800k for a tiny 2 bedroom home in Mountain View! Google does not pay that way UNLESS you are early employee or have VP position. So who are the morons over paying now?
#housing