Do the math. Plan accordingly
Someone's comments:
Cheesepoof2011/06/29
at 12:35 PM ETHouses in Canada have always wandered around a mean of 3.5 times average family income (except Vancouver, which historically is around 4x).
Sometimes it goes above, sometimes it goes below, but over time it will return.
Look at your local market. What's the average family income? What is the average home price? Do the math. If you're pushing silly valuations like 9-10x family income, like Vancouver, it's not sustainable. Either salaries will have to rise to bring the ratio down, or the housing price will come down.
Can't ignore the math. The specifics of how/when it will happen, that's all guessing.
But throwing out numbers like "25%" applied over a large country with many local markets is silly -- and gets endless anecdotal refutations simply because it won't reflect everyone's local condition.
Do the math. Plan accordingly.