The Great Real Estate Debate

Tully vs.Birger who's right about what's ahead?Tully has this to say:

Historically the ratio of housing prices to rents in the U.S. has been around 12.5; since 2000 that number has jumped to over 17! Expect the number, once again, to go back to the mean. And it’s obvious that housing on both coasts is becoming increasingly unaffordable, even with the help of exotic interest-only or reverse-amortization mortgages. The California Association of Realtors says that less than one-quarter of California households can afford a median-priced house. America is a fluid society—eventually jobs and residents will flee from the high prices.

Fortune