Posted on 01/28/2010 12:01:05 PM PST by SeekAndFind
Don't say we didn't warn you.
In January 2006, CNNMoney published a ranking of 299 U.S. housing markets, showing where home prices were most overvalued. Little was undervalued: Real estate was white-hot and prices were at or near what later proved to be their tops ( see here : http://money.cnn.com/2005/12/29/real_estate/buying_selling/handicapping_housing_markets/index.htm )
A total of 213 cities were overpriced, and Naples, Fla., was deemed the most insane, with 84% of homes valued over a fair market price, according to statistics compiled by National City Corp. and IHS Global Insight.
That finding so rankled the Naples Chamber of Commerce and area real estate agents that they hired economists to dispute the evaluation, according to Richard DeKaser, the real estate consultant who engineered the report for National City.
What a difference four years makes.
Today, Naples real estate sells at a 29% discount and the median home price is just $165,500, down from more than $390,000, according to the newly released 2010 report compiled by IHS Global Insight and PNC Financial Services (PNC, Fortune 500) (which bought National City).
Nationwide, just 87 markets are considered overvalued, and Naples is now the 15th most undervalued area. Nearly all markets -- 242 of 330 -- are considered priced below fair market.
Atlantic City, N.J., is now the most overvalued metro area in the nation. At 30.2% over fair market, it is the only city in the dangerous 30%-plus category. Almost at that cutoff is Wenachee, Wash., at 28.9%. The third most overpriced area is Ocean City, N.J.
The most undervalued market is Las Vegas, where homes sell for 41.4% below fair market, followed by Vero Beach, Fla. (-39.8%), Merced, Calif. (-37.7%), and Cape Coral, Fla. (-36.8%).
These judgments are determined by comparing median home prices, local interest rates, population densities and income, plus historical premiums
(Excerpt) Read more at money.cnn.com ...
Check it here :
http://money.cnn.com/real_estate/storysupplement/overvalued_cities/
ALSO, CLICK ABOVE LINK FOR A LIST OF THE MOST OVER AND UNDERVALUED CITIES IN AMERICA.
Undervalued here by -14.90%. No wonder we are having a lot of people and businesses move here.
Undervalued -18.6% here, but it’s the blue part of Ohio. That, and a Democrat controlled state government will keep the prices down and businesses out.
Houston - undervalued by 28.8%
The “fair market value” of real estate is determined by what someone is willing to pay for it at a given, specific, time..no more, no less..
properties don’t sell at below market price. The price they are selling at is determined by the market.
Agreed! This is a manufactured story wrapped up, as somehow news worthy? Fair market is exactly what you suggest.
Tim-
Undervalued according to who? The market is the market. If a home was selling for $350K and is now selling for $150K, the market is $150K. It’s not undervalued, but, rather, the market has returned to rationality.
Agree with you, specifically, to call Ocean City NJ overvalued is to proudly display ignorance of the local markets on the ground while crunching numbers in your consultancy offices.
Ocean City has the highest rental income potential of any area in NJ. Right now, January 2010, it’s nearly impossible to lose money on investment shore houses in that area due to the 10’s of millions of residents and potential customers from PA, NJ and NY that are the target market.
Oh no, very Conservative in East Texas. Louis Gohmert is our rep if that puts it in perspective.
Sale price = 2.5x to 3.5x the buyer's annual income
Sale price = 120 to 140 times the monthly rent for a comparable property
These have stood the test of time.
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