To assess whether home prices are over- or undervalued, Local Market Monitor crunches local income and housing data to come up with an “Income Price,” which represents what the average home price for a particular market would be without distortions in the market (such as the recent housing crash, or heavy investor speculation). The idea is that there’s a relatively stable relationship between local home prices and local salaries; investors who buy when homes are priced below the Income Price are more likely to make a good return.