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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Proud Deplorable who wrote (55948)	6/13/2006 7:14:53 AM
From: Dan3	Respond to of 306849

'Overpriced' housing gets more overpriced Despite a slowdown, more housing markets are overvalued than ever, says one economist. By Les Christie, CNNMoney.com staff writer June 12, 2006: 5:21 PM EDT NEW YORK (CNNMoney.com) - The rich have gotten richer, at least when it comes to home prices, according to a study released Monday. The most overvalued housing markets in the United States recorded much higher price increases during the first quarter of 2006 than the least overvalued markets, according to the latest analysis by National City Corp, a financial holding company, and Global Insight, a financial information provider. In the 50 most overvalued markets, prices increased 2.5 percent from the fourth quarter to the first, an annualized rate of 10.1 percent. In the 50 least overvalued markets, prices increased just 0.7 percent, an annualized rate of 2.7 percent..... ................... .....Some places, of course, bucked this national trend. Salinas, Santa Barbara and Sacramento, all in California, are all among the top 50 overvalued cities where prices dropped. And El Paso, Houston and New Orleans, all among the least overvalued cities, reported substantial price appreciation. El Paso prices sprouted at a rate of nearly 25 percent on an annual basis. According to Richard DeKaser, National City's chief economist, what usually happens when markets are returning to normal is that extremes of the market - the low and high ends, should move back toward the average; overvalued markets should rise slowly, if at all, and undervalued ones should shoot up. Just the opposite is happening. Overall, 39 percent of the 317 markets surveyed were judged to be severely overvalued. That's up from 36 percent of markets in the last quarter of 2005. DeKaser did find some evidence that prices may be ripe for a correction. A year ago prices in overvalued markets were going up even quicker than they are today, indicating they are pointing to a change of direction. That doesn't mean that a normal, balanced market is right at hand. "We've got a long way to go before we're out of this market," says DeKaser. The rest of the article is at: money.cnn.com