U.S Sees Drop in Homes Deemed Overvalued

U.S Sees Drop in Homes Deemed Overvalued

House Prices America
— a joint effort by Global Insight, a global forecasting firm, and National City Corp

read more about the study

The number of single-family homes considered to be overvalued continues to drop as cooling markets bring prices back to historic norms, according to the first-quarter update to Global Insight’s House Prices America study.

The study examined the top 317 U.S. real estate markets, which represent 92 percent of single family housing.

The analysis determines what home prices should be and how much current prices deviate from that norm.

Nearly half of the 317 metros experienced a decline in single family home prices in Q1 - overvalued metros number 54 out of the 317 studied.

The 2 most overvalued markets were Bend, OR , and Prescott, AZ - while Houston and Dallas are the 2 most undervalued markets according to the study.

Overall, the study says the Pacific and Mountain Northwest, most of Texas and the Carolina's have been the most resilient to the softening trend in the real estate markets.

THE REPORT STATES --- " THERE ARE NO SURPRISES --- THESE PRICE DROPS WERE EXPECTED "

The price declines we are seeing today in California, Florida, and New England were predicted two years ago when we identified them as the most extremely overvalued markets in the nation,” says Diffley.

The report also warns of further declines around the U.S. following the price declines in the central valley of California.

" Widespread weakness across the country is a reflection of the dramatic swing in sentiment and bargaining power between buyers and sellers,” says James Diffley, managing director of Global Insight’s Regional Services Group.