As housing prices drop and affordability soars, more and more buyers and investors are jumping off the fence to buy real estate properties. Home prices have now fallen to a level that the average U.S. home is currently undervalued by 12.2%, according to a new report from IHS Global Insight.
The IHS study, House Prices in America, reported that, of the 330 markets it tracked, homes are under-priced in 248. That contrasts sharply with four years ago when only 108 markets were undervalued.
…
The report claimed the most undervalued metro area in the nation is Vero Beach, Fla., where the median home price has fallen 29.7% since the first quarter of 2005 to $125,400. That is 42.5% below the expectation. Houma, La., prices, at a median of $113,500, are undervalued by 41.4%. Las Vegas prices have dropped more than 46% since 2005, and the city is now undervalued by 40.9%.
…
[T]here are still some over-valued areas. Atlantic City, N.J., for example. Here the median price is $243,600, an overvaluation of 44.1%, the most of any metro area. The Ocean City, N.J., median price of $302,100 is the second most overvalued, at 33.8%. In third place is Wenatchee, Wash., which at $247,100, is 29.3% above normal.In the biggest metro area, New York City, the price is just about right, with a median at $469,400, an under-valuation of just 3.3%. Los Angeles ($357,100) is a bit further off, undervalued by 6.6% and Chicago ($220,800) is down 13.2%. [CNNMoney] —
Fifty-seven metro areas had declines greater than 25% from their peaks and 134 had declines greater than 10%. However, nine metro areas – five of them in California – and the rest in Florida, Arizona and Nevada have seen prices decline by more than 50% from their peaks. [IHS]
The nation’s housing market, as a whole, is now slightly undervalued, a sharp contrast to 2005 when over 50 metropolitan areas were seen to be extremely overvalued.
Jeannine Cataldi, senior economist for IHS, cautions however, that a return of real estate markets to their natural equilibrium could take a long time. “Price declines are slowing but we’re still cautious,” she said. “We’re predicting stagnant prices through 2011.”
Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!
Leave a Reply