Above is the price-to-rent ratio (Case-Schiller). Q1/97=1:1; you can see that home prices took off (broke the typical range) at the very end of 2001. Housing prices will continue to fall (or rents may rise) for a while--likely another 3-4 quarters.
In another chart, Calculated Risk shows Case-Schiller for Chicago and Minneapolis housing prices. They've dropped 12% and 17%, respectively, from their peaks; whereas Charlotte and Dallas are only off by about 4%.
This graph shows housing prices v. nominal median income--both are national, not local.
As you can see, the typical average was about 1:1 from 1987-2000; then it took off.
Calculated Risk suspects that the decline will continue for another couple of years before it hits the typical average, mostly because "nominal income" usually moves up.
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