> >In California, Shiller and Case found, home prices rose 7.7 percent
>annually from 1995 through the third quarter of 2002 while personal
>income gained 4.5 percent per year. In Massachusetts, home prices
>were up 9.1 percent during that period while income increased only
>5.1 percent.<
>
>shouldn't they compare home prices to the incomes of those who can
>afford houses, i.e., more up-scale folks? in addition to the growth
>of per capita and total personal income, there's been a shift to the
>rich, no?
I don't know the details of their work, but I suspect they're comparing median to median. But if the broad housing market - 68% of U.S. households own their dwelling - is supported mainly by the incomes of the top quintile, how sustainable can that be? That would make it more bubbleacious, not less.
Doug