| A recent study conducted by Global Insight and | | | | smallest price gains since 2003 (a 7.3% annual |
| National City has come to the conclusion that a | | | | rate).Although there are overvalued areas cross the |
| significant number of America's housing markets are, in | | | | country, California and Florida led the nation by a |
| the words of the study itself, "extremely | | | | considerable margin. In fact, those two states |
| overvalued."The study discovered that some 71 U.S. | | | | accounted for 17 of the top 20 areas in the survey. |
| housing markets, representing more than a third of all | | | | Topping the list was Naples, Florida, which was |
| American housing units (39%), were valued at least | | | | determined to be 102% overvalued according to the |
| one-third higher than what was considered "normal" for | | | | study's findings. Salinas, California, was second, and the |
| that area, based on such mitigating factors as median | | | | top five areas on the list included Port St. Lucie, Florida; |
| sales prices and income, population, and historic home | | | | Merced, California; and Bend, Oregon.Among |
| values.The number of overvalued areas in America | | | | America's largest metropolitan areas, Miami, Florida, |
| was up 3% from the fourth quarter of 2004, when | | | | was considered the most highly overvalued market, at |
| housing in 64 U.S. markets was considered higher than | | | | 64 percent. Miami was then followed by three |
| could be considered sustainable. Even though a 3% | | | | California cities, Los Angeles (at 64%), Oakland (at |
| increase may not seem substantial in and of itself, the | | | | 61%), and San Jose (at 44%). The study also found |
| 39% overall figure represents a startling increase from | | | | two counties in New York, Nassau and Suffolk (at |
| the first quarter of 2004, when only 1% of America's | | | | 44%), and Phoenix, Arizona (at 43%) to be significantly |
| housing was considered overvalued.That's a 38% | | | | overvalued.It's not all bad news, however. There are |
| increase in less than two years, which is enough to | | | | still some parts of the country where the real estate |
| catch the eye of economists, but what do such figures | | | | markets weren't considered overvalued. In fact, of the |
| mean to consumers? The study suggests that it could | | | | 317 examined by the study, there were 88 America's |
| likely indicate a downturn in home prices in the | | | | largest metropolitan markets were actually considered |
| affected areas over the next three and a half years, | | | | to be undervalued. In that regard, several cities in |
| and the price drop could be significant. In fact, over the | | | | Texas seemed to fare best, according to the study. |
| years, it has historically translated to a drop of one-half | | | | The Dallas/Ft. Worth area led the nation, being |
| of the overvaluation.For the basis of the nationwide | | | | undervalued by 19%, Houston was second (at 16%), |
| study, statistics from the Office of Federal Housing | | | | and San Antonio was fourth (at 11%). |
| Enterprise Oversight were examined and analyzed. | | | | Much-beleaguered New Orleans, Louisiana, came in |
| According to those statistics, the first quarter of 2006 | | | | third, being undervalued by 12%, according to the |
| saw single-family American home prices posting their | | | | study's findings. |