My comment was that a 2+ ratio was obviously wrong, but that some sort of premium was probably justified. Now about Corvallis vs So Cal.
I would pay 50% more for a used car that “lived” 10 years in So Cal vs one that got rained on for 10 years. Corvallis has two monster employers: OSU and HP. Anything that happens to those two hits Corvallis like a ton of bricks. Nearby Albany is the industrial burg, but Corvallis’ university dominated voters don’t like most industry to come there. So a lot of the “industry” are small engineering outfits, one of which just laid off my brother. The surrounding countryside of Benton Co. is dominated by Timber. Another great recession proof industry?

So Cal has a milder climate and a more diversified economy. There are more foreign immigrants here; maybe a plus for Corvallis living quality if you don’t like them, but a negative for the economy. Huge amounts of undeveloped land surround Corvallis. The undeveloped land in So Cal is mostly in marginal inland areas that don’t compare to the coastal belt.

I tried for a while to find a job there that paid no less than 50% of what I make here, and I couldn’t so I gave up. There are a lot of low paying research jobs for people with my background at the university, but I’d rather make private industry wages here at a relatively stable employer than have to live from grant to grant at the whim of some professor.

That said, I like Corvallis and Benton Co. as an investment because it never had a big bubble in housing, and has really great summer weather when the school is out. I’m just trying to use it to gauge So Cal prices. I am very sure that parity is wrong and 2X is wrong. I’m more leaning to 1.5X but I could be wrong.

Since 1952, when the Fed began keeping track, household debt has NEVER EVER decreased from the previous reported quarter. The “rate of change” has decreased, as the graph in this article clearly shows, but the “level” of debt has ALWAYS increased EVERY SINGLE QUARTER. Now take a look at this “rate of change” graph from the early 1980’s to 2007. Not only was household debt increasing, again every single quarter, but it was also increasing at an increasing rate…for about 25 freaking years. Ok, so where are we now? Not only did household debt increase at a decreasing rate in 2007 and 2008, but for the VERY FIRST TIME EVER!!! the amount of hoiusehold debt has DECREASED.

I can not think of a single more cataclysmic event going on in our economy right now, and that is household DELEVERAGING. And rest assured, if the household is deleverageing, so will corporations, states, municipailities…any borrowing entity will HAVE to delver. Except one of course and that’s the US Government. Can the US Government really “replace” all that leverage? I really don’t think so. And on top of this, household savings is at 5.1% and most likely headed north of 10%…more money out of the economy.

Anyway, I believe THIS is the real story of our economy which is mostly ignored by mainstream media because they don’t understand it. And in the end, we “should” be delevering. We were forced to do it in the 30’s, and we are being forced to do it now. And it’s the “right” thing to do.