subject: Is Your Home Market Over-Valued? [print this page] Is Your Home Market Over-Valued? Is Your Home Market Over-Valued?
In every business, there are individuals that think positive and individuals that look at things from more of a negative point of view. Even when things are going their best and everyone concerned is making money hand over hand, you always have a devoted group of nay-sayers that are predicting trouble and gloominess.
A few months ago, those voices started to get louder and louder in the real estate market. The optimistic thinkers pointed to extremely low mortgage rates and record sales said everything was all right. Regrettably, in this case, the trouble and gloomers might have been on target.
A new survey shows that an rising number of housing markets in the United States might be overestimated, and as the common sense suggests, an overestimated real estate market translates into a slower real estate market. The main culprit is increasing interest rates.The rate for fixed mortgages is up in excess of half a percent in the past year, and the rates on adjustable-rate mortgages is up still more.
The real estate market that was deemed to be the most overvalued was in Naples, Florida, where the study deemed to be 101.5% higher than what National City consider being fair value. The city of Bend, Oregon was second in the study, next at nearly 90%.
If you're looking for real estate markets with the intention of still finding a deals, head to the great state of Texas. All five of the most undervalued markets were in the Lone Star State, led by College Station (home of the Texas A&M Aggies) which was deemed to be over 22% undervalued. Dallas was second on the list at 21% undervalued. But how do you know if your housing market is overvalued?
Odds are, if you live in California or Florida, it is. Nine of the top ten overvalued markets are in either Florida or California, with Salinas, Merced and Madera, California ranked 3, 4 and 5. Port St. Lucie, Florida is deemed to be 74% overvalued, good enough for number 6. Stockton and Santa Barbara, California take 7 and 8, while Florida takes the final two spots at 9 and 10 with Miami (70.8%) and Punta Gorda (70.2%).
Whereas this may be a certain sign of a awaiting real estate slouch, the best thing any potential investor can do is acquire a long, hard look at all accessible study before you settling on taking a positive or negative viewpoint.
