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Are You Living in a Bubble?
| | Wednesday, March 02, 2005 @ 09:53 AM EST
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Contributed by: Ken Lyons
Ken Lyons Properties
Read more archived articles about Economy - Bad
Richard DeKaser, chief economist for National City Corp., ranks 99 major real estate markets based on how much they are under or overpriced relative to "normal housing values."
Home prices in Salt Lake City? "Too low."
But, in Tucson, Ariz. "Just right."
These were the conclusions of study by Richard DeKaser, chief economist for National City Corp., who ranked 99 major
real estate markets based on how much they are under or overpriced relative to what he deems "normal housing values."
In 2004, houses in Chico, Calif. sold for 43 percent more than their fair value, according to DeKaser, while houses in Salt Lake City sold for 23 percent less than their fair value.
To come up with each market’s fair value DeKaser studied data going back 25 years. Among other things, he looked at how much buyers are paying today relative to their incomes verses how much they paid in the past. This helps take into account the premium buyers are willing to pay for such things as location, weather and amenities.
http://money.cnn.com/pf/features/lists/home_valuations/
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