[VegasCowboy]

Thanks!

The rent market here is a little murky, so I can't give you a good answer. Apartment rent has sky-rocketed because of a bunch of condo-conversions, and the detached market has a lot of dogs (so its hard to get a feel by reading the paper). However, I don't think the tax effected monthly cost of home ownership is out of line with rents right now based on purely anecdotal information.

[economist-student]

In Spain, a 400 euros a month flat sells for about 120,000-180,000 euros. This tells two things, either rents are too low or purchase prices are too high. I strongly believe it is the latter. The rent to sale price works out about the same as the P/E ratio in stocks.

Another way to evaluate RE, it's by calculating how much an average family spends each month on housing expenditures. If the RE "P/E" ratio is telling you that rents have to increase to something like 50-60% of monthly income, it is overvalued.