Home Affordability Returns to Pre-Bubble Levels

...In some regions. I'm generally bearish on Manhattan home prices. http://online.wsj.com/article/SB10001424052748703313304576132291585938656.html "Markets that now appear to be undervalued include Detroit, Las Vegas, Atlanta and Phoenix....Home prices still remain overvalued by both measures in several markets, including Seattle, Charlotte, New York and Portland, Ore." "Nationally, the ratio of... [more]

...In some regions. I'm generally bearish on Manhattan home prices. http://online.wsj.com/article/SB10001424052748703313304576132291585938656.html "Markets that now appear to be undervalued include Detroit, Las Vegas, Atlanta and Phoenix....Home prices still remain overvalued by both measures in several markets, including Seattle, Charlotte, New York and Portland, Ore." "Nationally, the ratio of home prices to annual household income reached a peak of 2.3 in late 2005. But by last September, it had fallen to 1.6, matching the lowest level in the 35 years the data have been collected and well below the historical average of 1.9 between 1989 and 2003." "Measuring home prices relative to income is not the only way economists calculate housing affordability. They also examine the relationship between house prices and rents. Measured by the price-to-rent ratio—the price of a typical home divided by the annual cost of renting that home—prices are fairly valued, or undervalued, in around 20 markets. Nationally, the price-to-rent ratio stood at 14.85 at the end of September, above the 1989-2003 average of 12. The data suggest pockets of the country have further to fall." [less]