Fifty-three metropolitan areas representing 31% of the total U.S. housing market are considered extremely overvalued and confront a high risk of future price corrections, a study conducted by National City Corp. says. The study determines a market extremely overvalued if prices are 30% above where the study estimates they should be based on historic price data, area income, mortgage rates and population density.
Wednesday, August 17, 2005
Home prices 'extremely overvalued' in 53 cities
According to this article, 53 cities have overpriced real estate. My problem is that I'm not sure how do they calculate "correct" price. It seems that it's based on "historical" trends, which I don't trust anyways. Washington DC is #49 with 31% overpricing, see the chart here.
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