Most Overvalued Housing Markets

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Normally I don’t just repost straight news stories. But I thought this one had some interesting data. So here it is. From CNNMoney.com….

Link to original article

Most Overvalued Housing Markets
Latest analysis of 299 markets: See how your hometown ranks.
By Les Christie, CNNMoney.com staff writer
January 3, 2006: 2:33 AM EST

NEW YORK (CNNMoney.com) - Sixty-five of the nation’s 299 biggest real estate markets are severely overpriced and subject to possible price corrections.

That’s according to the latest (third quarter) Housing Market Analysis conducted by National City Corp, a financial holding company, in conjunction with Global Insight, a financial information provider.

The report named Naples, Florida as the most overvalued of all housing markets in the United States. A single-family, median-priced home there sells for $329,970, 84 percent more than what it should cost — $180,956 — according to the analysis. {Jay’s note: I have no idea what “analysis” was done to determine what a median priced home “should cost”… I’d really like to see their “analysis”. Remember, there are “lies, damn lies — and statistics” — a quote frequently attributed to Mark Twain….and incorrectly I might add. But I digress}

National City arrives at its estimates of what the typical house in these markets should cost by examining the town’s population densities, local interest rates, and income levels. It also factors in historical premiums and discounts for each area.

Other markets deemed wildly overpriced included Merced, California (by 77 percent), Salinas, California (75 percent), and Port St. Lucie, Florida (72 percent).

Undervalued markets were College Station (-23 percent), El Paso (-18 percent), and Killeen (-16 percent), all in Texas. That state dominated the discounted markets list with nine of the 10 most undervalued housing markets. Montgomery, Alabama was No. 8 among the undervalued markets.

The data did produce some evidence of prices moderating, according to National City’s chief economist, Richard DeKaser.

In Massachusetts, for example, one of the hottest of housing markets over the past few years, each of the seven housing markets analyzed was still overvalued. Prices, however, had fallen in all seven. That would indicate the state is trending back toward normal valuations.

The same could not be said of Florida. The Sunshine State had 15 different markets on the list of extremely overpriced metro areas and all 15 had grown more overpriced during the quarter.

Amidst all these hot and cold markets there were a few judged, like Goldilock’s porridge, “just right.” They included Albuquerque New Mexico, Dayton Ohio, and Omaha Nebraska. In all those towns actually selling prices closely tracked the expected values.

Read on for a table listing cities and their ranking…

Metro area % over/ under- valued Naples, FL +84% Merced, CA +77% Salinas, CA +75% Port St. Lucie, FL +72% Stockton, CA +72% Madera, CA +70% Santa Barbara, CA +70% Modesto, CA +67% Napa, CA +65% Riverside, CA +65% Medford, OR +64% Sacramento, CA +61% Atlantic City, NJ +59% Chico, CA +59% Fresno, CA +58% West Palm Beach, FL +57% Redding, CA +56% Santa Rosa, CA +56% Bend, OR +56% Sarasota, FL +56% Miami, FL +55% Oxnard, CA +55% Vero Beach, FL +54% Los Angeles, CA +54% Fort Lauderdale, FL +53% Vallejo, CA +53% San Luis Obispo, CA +53% Cape Coral, FL +52% Bakersfield, CA +51% Palm Bay, FL +49% Barnstable Town, MA +48% Oakland, CA +47% Ocean City, NJ +47% Prescott, AZ +46% Panama City, FL +46% San Diego, CA +46% Visalia, CA +45% San Jose, CA +44% Deltona, FL +44% Santa Cruz, CA +44% Santa Ana, CA +44% Bellingham, WA +43% Fort Walton Beach, FL +43% Nassau-Suffolk, NY +43% Poughkeepsie, NY +39% Reno, NV +38% Las Vegas, NV +38% Kingston, NY +38% Washington, DC-VA-MD-WV +37% Bethesda, MD +36% Providence, RI-MA +35% San Francisco, CA +35% St. George, UT +35% Ocala, FL +35% Phoenix, AZ +35% Portland, OR-WA +35% Eugene, OR +34% Tampa, FL +34% Pensacola, FL +33% Orlando, FL +33% Grand Junction, CO +31% Honolulu, HI +31% Edison, NJ +31% Duluth, MN-WI +31% Jacksonville, FL +31% Virginia Beach, VA-NC +29% Worcester, MA +29% Portland, ME +29% Flagstaff, AZ +29% Essex County, MA +28% Baltimore, MD +28% Charlottesville, VA +28% Charleston, WV +28% Tucson, AZ +27% Newark, NJ-PA +27% New York, NY-NJ +27% Monroe, MI +26% Bay City, MI +26% Flint, MI +26% Olympia, WA +26% Wilmington, NC +25% Tacoma, WA +25% Salem, OR +25% Minneapolis, MN-WI +24% Asheville, NC +24% Seattle, WA +24% Mount Vernon, WA +24% Jackson, MI +24% Longview, WA +24% Lakeland, FL +23% Brunswick, GA +23% Gainesville, FL +23% Manchester, NH +23% Bremerton, WA +22% Tallahassee, FL +22% Holland, MI +22% Niles, MI +21% Savannah, GA +21% Santa Fe, NM +21% Chicago, IL +21%

Metro area % over/ under- valued Eau Claire, WI +20% Vineland, NJ +20% Trenton, NJ +20% Rockingham, NH +20% Anchorage, AK +20% Casper, WY +20% Racine, WI +20% Battle Creek, MI +20% Springfield, MA +19% Detroit, MI +19% Greeley, CO +19% Burlington, VT +18% Wilmington, DE-MD-NJ +18% Camden, NJ +18% Boston, MA +18% Lansing, MI +18% Boulder, CO +18% Michigan City, IN +17% Ann Arbor, MI +17% York, PA +17% Milwaukee, WI +16% Madison, WI +16% Philadelphia, PA +15% Spokane, WA +15% Warren, MI +15% Norwich, CT +15% Richmond, VA +15% Corvallis, OR +14% Grand Rapids, MI +14% Muskegon, MI +14% Lake-Kenosha, IL-WI +14% Albany, NY +13% Allentown, PA-NJ +13% Saginaw, MI +13% Harrisonburg, VA +13% La Crosse, WI-MN +13% Boise City, ID +13% Pittsfield, MA +13% Wenatchee, WA +13% Rockford, IL +13% Farmington, NM +13% Cambridge, MA +12% New Orleans, LA +12% Janesville, WI +11% New Haven, CT +11% Gainesville, GA +11% Kalamazoo, MI +11% Roanoke, VA +11% Fayetteville, AR-MO +11% Canton, OH +11% Lancaster, PA +10% Colorado Springs, CO +10% Denver, CO +10% Peoria, IL +10% Reading, PA +10% Fort Collins, CO +10% Waterloo, IA +9% Gary, IN +9% St. Louis, MO-IL +9% Champaign, IL +9% Yakima, WA +9% Dalton, GA +9% Sheboygan, WI +9% Toledo, OH +9% Green Bay, WI +8% Springfield, OH +8% Youngstown, OH-PA +8% Lynchburg, VA +8% Davenport, IA-IL +7% St. Joseph, MO-KS +7% Mansfield, OH +7% Hickory, NC +6% Fond du Lac, WI +6% Cleveland, OH +6% Bridgeport, CT +6% Billings, MT +5% Chattanooga, TN-GA +5% Idaho Falls, ID +5% Cheyenne, WY +5% Pueblo, CO +5% Dubuque, IA +4% Topeka, KS +4% Hartford, CT +4% Kansas City, MO-KS +4% Akron, OH +4% Wausau, WI +4% Salt Lake City, UT +4% Scranton, PA +4% Lexington, KY +4% Bismarck, ND +4% Athens, GA +3% Fargo, ND-MN +3% Sandusky, OH +3% Knoxville, TN +3% Bloomington, IN +3% Anderson, IN +3% Lafayette, LA +3% Louisville, KY-IN +3% Durham, NC +2% Atlanta, GA +2%

Metro area % over/ under- valued Erie, PA +2% Columbia, MO +2% Columbus, OH +2% Harrisburg, PA +2% Kennewick, WA +2% Provo, UT +2% Lima, OH +1% Utica, NY +1% Bowling Green, KY +1% Hattiesburg, MS +1% Decatur, IL +1% Columbia, SC +1% Cincinnati, OH-KY-IN +1% Rochester, MN 0% Greenville, SC 0% Oshkosh, WI 0% Lawrence, KS 0% Las Cruces, NM 0% Omaha, NE-IA 0% Appleton, WI 0% Albuquerque, NM 0% Burlington, NC 0% Ogden, UT 0% Baton Rouge, LA 0% Dayton, OH 0% Amarillo, TX 0% Alexandria, LA 0% Kokomo, IN -1% Nashville, TN -1% Winston-Salem, NC -1% Spartanburg, SC -1% Florence, SC -1% Birmingham, AL -1% Sherman, TX -1% Jackson, MS -1% Houma, LA -1% Pittsburgh, PA -1% Binghamton, NY -1% Monroe, LA -2% Columbus, GA-AL -2% Sioux Falls, SD -2% Des Moines, IA -2% Columbus, IN -2% Lincoln, NE -2% Mobile, AL -2% Greensboro, NC -2% Albany, GA -2% Augusta, GA-SC -2% Raleigh, NC -3% Owensboro, KY -3% Evansville, IN-KY -3% Bloomington, IL -3% Shreveport, LA -3% Cedar Rapids, IA -3% Greenville, NC -4% Syracuse, NY -4% South Bend, IN-MI -4% Indianapolis, IN -5% Springfield, IL -5% Rocky Mount, NC -5% Oklahoma City, OK -5% Jefferson City, MO -5% Buffalo, NY -5% Fort Wayne, IN -5% Charlotte, NC-SC -6% Warner Robins, GA -6% Iowa City, IA -6% Decatur, AL -6% Wichita, KS -6% Little Rock, AR -6% Macon, GA -6% Springfield, MO -6% Elkhart, IN -6% Waco, TX -7% Charleston, SC -7% Midland, TX -7% Austin, TX -7% Lubbock, TX -7% Tyler, TX -7% Corpus Christi, TX -8% Fort Smith, AR-OK -8% Tulsa, OK -9% Memphis, TN-MS-AR -9% Rochester, NY -9% San Angelo, TX -10% Lafayette, IN -10% Abilene, TX -11% San Antonio, TX -11% Huntsville, AL -11% Longview, TX -11% Odessa, TX -12% Montgomery, AL -12% Houston, TX -14% Fort Worth, TX -15% Beaumont, TX -15% Dallas, TX -16% Killeen, TX -16% El Paso, TX -18% College Station, TX -23%

I shall refrain from comment on the fact that College Station, TX is at the bottom of the pile. For those who don’t know, College Station is the home of Texas A&M University—THE University of Texas’ arch rival. This report showing the A&M hometown at the bottom of the heap came out the day before UT was crowned national football champions. Ironic isn’t it?

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