The most over and undervalued housing markets in America

U.S. home prices are undervalued according to Trulia economist Jed Kolko

TRD New York /
Jun.June 29, 2014 04:00 PM

 Jed Kolko, chief economist at Trulia, argues that U.S. home prices are 3 percent undervalued compared with their long-term fundamentals.

To gauge whether home prices are over- or undervalued, Kolko considers “the price-to-income ratio, the price-to-rent ratio, and prices relative to their long-term trends using multiple data sources.”

But housing is as much a regional story as it is a national one — and regional markets are markedly different.

The most overvalued housing markets are largely located in California, but again, Kolko doesn’t think these are in bubble territory.

“Orange County, today’s frothiest market, is just 17 percent overvalued now versus being 71 percent overvalued in 2006 Q1,” he writes. “Among the most overvalued markets today, only Austin looks more overvalued now (13 percent) than in 2006 Q1 (8 percent) – and that’s because Austin (and Texas generally) avoided the worst of last decade’s bubble and bust.”

 

Meanwhile, home prices are the most undervalued in Ohio. “But in several of the most undervalued markets, including Detroit and Chicago, prices are now rising year-over-year in the double digits,” writes Kolko. “But those markets are unlikely to stay on the most-undervalued list for many more quarters.”

 

Related Articles

arrow_forward_ios
A homeowner in New York was about three times as likely to have a mortgage in forbearance, an analysis by Kroll found. Being self-employed doubles the likelihood. (iStock)

TRD Insights: NY, NJ homeowners more likely to be in mortgage forbearance

TRD Insights: NY, NJ homeowners more likely to be in mortgage forbearance
Mayor Bill de Blasio (Getty, iStock)

Developers fume over city plan to cut affordable housing spending

Developers fume over city plan to cut affordable housing spending
(Credit: iStock)

Six weeks, six jumps in mortgage applications to buy homes

Six weeks, six jumps in mortgage applications to buy homes
With home sellers also staying on the sidelines amid the public-health crisis, the market is now giving rise to bidding wars. (iStock)

The return of the bidding war

The return of the bidding war
(Credit: iStock)

Loan applications to buy homes rise for fifth week

Loan applications to buy homes rise for fifth week
Zillow CEO Rich Barton (Credit: Barton by Steve Jennings/Getty Images for TechCrunch; iStock)

Zillow relaunches iBuying program

Zillow relaunches iBuying program
Companies across the U.S. are warming up to the idea of remote working. Some employees who live in expensive regions like the San Francisco Bay Area, figure they might as well move someplace cheaper. (Credit: iStock)

The exodus: A rise in remote working could crater expensive housing markets

The exodus: A rise in remote working could crater expensive housing markets
The United States’ housing policy response to the coronavirus crisis has “significant gaps” that leave most renters vulnerable (Photo by Andrew Lichtenstein/Corbis via Getty Images)

TRD Insights: Most renters at risk despite aid

TRD Insights: Most renters at risk despite aid
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...