If that’s the prevailing income in an area the cost of housing will eventually reflect it, which will not bode well for resale values. Unless, of course, the population increases so rapidly that prices aren’t depressed by individuals doubling or tripling up in a given house because they can’t afford shelter otherwise.
Its a vicious cycle right now. Most people have to sell the hosue they live in to buy another house. If there is no equity in their current house due to depressed prices they cannot make the move. One or two foreclosures in a neighborhood will ruin the comps for 6-12 mos.
Its all bad right now. Well unless you are my brother in law with a mini mansion in Fairfax County, VA which is one of the hot spots.