Yes, you read that headline right. In aggregate, and based on their historical relationships with local rents and incomes, San Diego County home prices are reasonable. Not cheap, but reasonable.

Exhibits A and B are a couple of long-term graphs that I've updated throughout the years. The first displays the historical ratio of San Diego home prices to San Diego per capita income; the second is the ratio of home prices to local rents. These ratios serve as a gauges of real estate "expensiveness" by measuring how much people have to pay for housing in comparison to how much they earn and in comparison to how much it would cost to simply rent the roofs over their heads.

Both graphs show that while prices became completely severed from economic reality during the boom, they are now solidly in the middle of the range that prevailed in the years before the world went mad.

By these metrics, San Diego housing has still been cheaper in the past. The price-to-income ratio would have to fall 15 percent from this level to equal the all-time low it hit in 1997. And the price-to-rent ratio, which actually set its worst levels in 1986, would have fall 22 percent from here to hit its record low.

But while not dirt cheap, San Diego homes are finally reasonable. Given the astonishingly high home prices that prevailed until somewhat recently, that fact alone is very much worth noting.

These graphs provide a very broad-stroke look at aggregate San Diego housing expensiveness. Following are some things to keep in mind when thinking about them.

First, the graphs tell us how expensive houses are now, not where they're going. There's no saying we won't blow right through the prior valuation lows this time around. The recently burst bubble did after all make a mockery of the former highs, and it's not unreasonable to suspect that such a dramatic boom could be followed by an equally dramatic bust. Besides, these simple valuation metrics don't take account of transient market forces such as foreclosures and unemployment, both of which are weighing heavily on the market for the time being.

Second, the data aggregates the entire county together, averaging out differences between San Diego's various sub-markets. These differences, as I've often discussed here, are substantial.

Third, home prices are based on the latest Case-Shiller index release as of December 2008, which (as I've also discussed) best represents November pricing. Real-world prices appear to have continued falling since then, so as of right now the ratios are even a little better than they appear on the charts.

Finally, the charts don't take into account mortgage rates and their impact on monthly payments. I will devote a separate post to this topic on Thursday.

So, as with all data, there is plenty of nuance to consider.

But did I mention that San Diego home prices are reasonable?