Here is the link to the transcript of the talk show with Rich Toscano – it is imperfect:

Blog Talk Radio with Rich Toscano

A summary of his comparison of home prices vs. local incomes, and prices vs. rents:

Well, you can’t — some people say, “Oh, it should be three times income or something.”  It doesn’t really work that way because I’m just taking a per capita income like — well, I’ll tell you.  I’ll answer the question. 

The typical ratio has been about eight times per capita income. 

The ratio is eight for what it’s worth, but it’s really not really worth anything, except to compare it to what it’s been in the past.  So, right now — yeah now we’re much below — we’re about 7.3 or something like that and it was maybe 8.1 with historical — we’re roughly 10% below the historical price/income ratio. 

We’re about 4% below the historical price-to-rent ratio.  So, we’re in undervalue historically, not dramatically so, but we’re there, which is now, we just kind of might want to buy houses.

Rich also mentioned that he bought a house recently! He goes into detail about it here:

http://piggington.com/piggingtoncom_jumps_the_shark

Excerpt:

If this outlook is correct, as I believe it is, then today’s ultra-low rates make this an ideal time to take out a chunky 30-year fixed mortgage, and to sit back and let inflation hew away at the real value of the mortgage and the monthly payments over the years to come.

So, the missus and I went out looking for homes.  We only found one in our price range, a single family house in Bay Park, that we thought was awesome enough to be a long-term home.  So we made an offer, got a loan with as low a down payment as we could get away with, and have now re-joined the ranks of the titular Landed Poor.

I sat out an inflation-adjusted home price decline of almost 50%, and now I’m buying at a time when prices are cheaper than normal and monthly payments at 45% below their historical median.  That’s close enough for me.

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