The income gap is a helpful overall measure of housing market fundamentals but should be taken with a grain of salt, said Delores Conway at the University of Southern California's Lusk Center for Real Estate.
That's because people can buy houses priced below the median price. Also, interest-only loans, adjustable rate mortgages, subprime loans and other forms of "creative financing" make it possible today for people to buy, Conway said.
Equity from selling a house also helps close the gap by letting the buyer make a substantial down payment and reducing the price, Conway said.
Still, people eventually will stop buying when prices rise too high, said Celia Chen, director of housing economics at Economy.com, a West Chester, Pa., research firm. That will drive prices down, Chen said.
The market tends to self-correct itself, said Conway, who predicts that prices will begin leveling off in the next couple of years.
Some Los Angeles-area appreciation rates have already fallen into the teens, though Bakersfield's market remains strong, she said.