This is the kind of metrics that scream housing bubble. And keep in mind rental prices are more sensitive to monthly data because you are paying this amount out of your net income. No tax breaks, toxic mortgages, or any other gimmick. One simple rule when evaluating real estate is trying to figure out a home price based on rental income. One I use is the following:$2,250 x 12 months x 10 = $270,000
We're currently renting, and the owner has had the place valued three times in the last 3 months (he's re-financing). We know what the valuers think the place is worth - we asked them.
I ran the above equation on our rent, and compared it to the valuer's estimation.
According to the above equation, either we are paying less than 1/4 the rent we should be, or the place is over valued by a factor of 4.5.
The price would have to fall 78% to bring it back in line with what it is renting for.
Ouch. Bubble anyone?