The Incredible Shrinking Paycheck

The Department of Labor reports that the in Santa Clara County, the heart of Silicon Valley, the average salary fell 17% from $76,300 in 2000 to $63,000 in 2002.

Meanwhile, the median home price in Santa Clara County fell 11% from $520,000 in 2000 to $462,000.

According to the U.S. government, a good rule of thumb is that you can afford to spend 2.5 times your gross annual income on your house. You think there might be a housing bubble?