Home Price Valuation
GlobalInsight recently released the 2006 fourth quarter update of the U.S. Housing Valuation Analysis which showed the incidence of overvaluation in the nation’s housing market continued to decline, the result of falling home prices. Declines in home price valuation were concentrated most sharply in California, Florida and the New York metro area. Between the third and fourth quarters, California had 21 metro areas out of 26 with negative price appreciation, while Florida had 10 out of 18.
Home price appreciation continued to be strongest in those parts of the country that came late to the explosion in home prices - the interior and northern parts of the west, including northern Arizona, Utah, Idaho, Washington and Oregon.
While Naples, FL remains the most over-valued market in the U.S., its level of overvaluation has declined during this period to 79.9%, down from 83.6% in the third quarter. Meanwhile, Dallas and College Station-Bryan, TX remained virtually tied for the most undervalued markets, 21.6 and 22.5%, respectively. However, home prices rose slightly in both markets.