The Mercury News had two articles on Bay Area housing yesterday. The first, on the front page, talked about housng prices. The median price of houses sold in Santa Clara County in 2004 was up 15 percent from 2003. In the business section, there’s an article on residential rents. The average apartment rent dropped in the 4th quarter in Santa Clara County. It had risen the previous quarter, but that was the first increase in 3.5 years. The average is now $1283. The peak value was $1955 during the first quarter of 2001.

I’m a broken record, but there’s a bubble. I don’t know much about econ, but this makes no sense. How can housing prices keep going up and rents keep going down? That completely violates the principles of supply and demand, unless supply and demand for buying and renting have disassociated themselves, in which case there’s a speculative mentality at work. Bubble.

But I might be completely wrong about this. Which is fine, because I have a backup plan: Houston. Why not? It’s cheap to live there, I have friends and family there, and a good church to go to. A coworker of JR and mine bought a place there for ridiculously little (it was a price that literally does not exist in the Bay Area) and is happy in Houston. If I’m wrong about things here, that’s where I’m headed.