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Lies, Damn Lies and Affordability Indexes
My apologies to Mark Twain.  There has been a lot of comment today about the dreadful numbers that come out with each affordability index report and I would like to take the opportunity to play devil's advocate.  Sometimes, when I look at a new report or statistical anylysis, I run the report's conclusion through my "common sense meter" before I even begin to read the data.  The same way they used to teach us in math class: guestimate the answer so you can readily see if your calculations are severly flawed when you are finished.  In the case of housing affordability here in Southern California, the reality seems to differ from the reports.  We can't build enough homes to satisfy the demand.  The CAR leadership council recently released these projections: by 2008-2010 California is expected to be 15,000,000 homes short of demand!  In an earlier post I reported that The US Census bureau projects massive influxes of people to the sun belt and California will remain the most populous state by a landslide.  It is difficult to see how this continues to happen when only 1% - 24% (depending on the report you read) can afford to live here.
More probable, the reports themselves ... more

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