House Prices to Income

In: Housing US Economy

13 Jan 2010

The following chart shows the ratio of U.S. housing prices to income for various major cities from 1989-2009. If we say bubbles exists in cities where that ratio is more than two standard deviations outside its long-run average, we still have residential real estate bubbles in Seattle, Portland, New York and Miami. On the other hand, bubble condition no longer exist in Dallas, Denver, Las Vegas, Los Angeles, Phoenix and San Francisco (!).

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