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Kelly Cunningham, economist for the National University System Institute for Policy Research, says investors are jumping into the San Diego housing market, and since there is not much new housing coming on to the market, the ratio of housing prices to income is getting a bit on the scary side again. Nationally, housing prices are generally 2.5 to 3 times median household income. In California, the ratio "tends to be well over 4," says Cunningham. In the bubble years of 2005 and 2006, San Diego's ratio zoomed to a staggering 8. Then came the bust, and it went back to 4. Look out. In the first quarter of this year, it got back to 5. The median selling price for a home was $360,000, according to the National Association of Homebuilders. The median household income was $72,300. The ratio is 4.98.

But consider this: in the first quarter of 2012, a year earlier, the median income in San Diego was $75,900, so incomes dropped 4.7%. But the median price of a home has zoomed 12%. The ratio has gone from almost 4 to almost 5 in a year. "This has all the signs of a bubble," says Cunningham. "Prices are rising faster than income (which is actually declining). This is an investor-driven increase." The investors can borrow money cheaply, but first-time or moderate income homebuyers might not be able to get a mortgage at all. Nationally, cash sales of homes are running at one-third of purchases. Tech jobs are about 10% of San Diego's total; many of those employees have stock options against which they can borrow. So they may be still buying. Places like Rancho Bernardo may have good housing markets because of the ability of techies to buy.

San Diego used to be more of a rental market. No longer. The rate of buyers is now 57%, surpassing the 54% rate of the state. Cunningham is concerned that the underwater rate (house worth less than the mortgage) may rise again. The bubble is expanding and that may not be as healthy as some seem to believe.

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