I don't care what your local realtor might have to say ... real estate remains largely overpriced just about anywhere I look -- whether it's South Florida, California, or more "stable" areas like Pennsylvania, Delaware and New York.
Look, the basic numbers just don't make sense ...
According to a 2005 Census economic survey:
Only 5% of individuals had six figure incomes and the top 10% got paid more than $75,000.
On a household level, the top 5% (75% had two earners) had incomes of $166,200 or more .
The top 1.5% of households raked in more than $250,000.
Meanwhile, nearly everywhere I look any house that a middle-class person would consider buying (meaning reasonably attractive, in a decent school district, in good condition, etc.) is easily pushing $400,000 or $500,000.
How does that add up? If the fifth percentile household makes about $160,000 that means a $400,000 house is marginally "affordable" in my book. Unlike most people, I'm factoring in taxes, insurance, car payments (two BMWs, I'm sure), and all the other everyday necessities that an affluent household simply must have. And I'm -- gasp! -- actually assuming that they might want to save some money for retirement and their kids' college funds.
So call me crazy, but I simply do not see how -- given falling prices, recently rising rates, and ultratight credit conditions -- that housing at the higher end has any chance in hell of rebounding or even stabilizing anytime soon!
Full disclosure: I have been renting throughout the madness ... in Manhattan, then South Florida, and now in the Brandywine Valley of DE/PA.
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