U.S. Market is ‘Undervalued,’ Report Says

Posted in Real Estate on March 22, 2010 by Kevin Brass

After two years of falling prices, U.S. housing is undervalued in most markets, according to a new study.

Recent data showing a miniscule 0.1 percent drop in prices in the fourth quarter “indicates that the housing market is still working towards--and is close to achieving--stabilization,” concludes the House Prices in America report prepared by IHS Global Insight and PNC Financial Services Group.

None of the major U.S. metro markets were rated as significantly overvalued by the study. In contrast, 137 of 330 metro areas were listed as overvalued during the peak bubble years.

While these types of reports are often easily dismissed, it’s worth noting that the IHS study correctly spotted vast over-valuations in 2005 and 2006, offering signals that the bubble was about to burst.

In 2005 the study identified 52 metro markets as extremely over valued, primarily in California and Florida. For example, Miami was listed as 49.4 percent overvalued and prices subsequently fell 35.8 percent. Thirty-one metro areas have posted declines of greater than 40 percent from their peaks, the study found.

Although overall the U.S. is now seen as undervalued, the study still found some markets that are rated as over-valued. For example, Honolulu is still overvalued by 13.6 percent and Spokane, Wa., is 13.1 percent overvalued, the study found

The full report and a breakdown of individual markets can be found here.

Tags: United States, California, Florida, LasVegas

Comments

0 # 2010-03-24 18:35

According to reports about foreclosure shadow inventory there apparently is a significant amount of homes and condos in the pipeline or heading into the pipeline for short sales and foreclosures. These reports indicate the US is a long ways away from reaching bottom in real estate prices. Investors are also entering the market now to buy foreclosures and try to flip them for a quick profit. That too is resulting in more inventory in the housing market with homes being bought and then back on the market for aborption rather than being owned as a residence.

0 # 2010-08-19 11:40

According to the recent reports US market is undervalued in case of property as after two years of falling prices. However most of the people are looking for luxurious apartments at low rate and they are getting but in order to search one can take the help of real estate agents or dealers as they have the clear idea about the properties. Moreover those who are interested to know about real estate agents in order to find affordable properties can visit this site or can call on 0120-4338222 or 800-232-2343.

http://www.ncrdealer.com/

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IPJ Report

A daily feed of news and analysis on the international property business.

RSS	Author: Kevin Brass has covered the quirks and trends of the global property industry for many than 20 years, including regular features and analysis in the International Herald Tribune and the New York Times.