Perceptions perpetuate reality. What I’m seeing in my local market falls right in line with what this report states. The average income here is over $90k/year and the average home price was (last time I checked) just over $200k. That is a cost to earnings ratio of just over 2 which is phenomenal. But, people are afraid to buy because they keep hearing that the market is bad. (Well, at least they were. The market really feels like it’s heating up now.) They don’t want to buy a home that will be worth $50,000 less next year, regardless of all the evidence the contrary.
As soon as people are confident that we are not heading into the next great depression (which by all accounts is an absurd expectation) they will begin buying homes again and bring the price back up to a good market level.
I think the report makes perfect sense. Plus, the comments about consumer sentiment just help cover the report writer’s bets no matter what the market does.