It is worth considering the prevalence of extremely overvalued markets, as these represent the greatest risk for future price decline. As recently as 2004, extremely overvalued metro areas accounted for a negligible share of the nation’s single-family housing market, but that changed dramatically during 2005 and the first half of 2006. By the second quarter of 2006, extremely overvalued metro areas were 18 percent of all single-family units and 36 percent of all related real estate asset value. As of the third quarter of 2007, however, those figures had fallen to 11 percent and 21 percent respectively*
Over-Valued Housing Markets
Metropolitan Area House Valuations
|
Price
|
Over-
|
Price
|
Over-
|
|
(,000)
|
Valuation
|
(,000)
|
Valuation
|
|
Bend, OR
|
$317.5
|
68.1%
|
$320.1
|
70.0%
|
|
Atlantic City, NJ
|
$274.5
|
65.9%
|
$273.7
|
64.4%
|
|
Madera, CA
|
$310.6
|
70.2%
|
$291.6
|
62.3%
|
|
Merced, CA
|
$269.4
|
68.9%
|
$248.3
|
56.6%
|
|
Prescott, AZ
|
$244.5
|
59.5%
|
$237.6
|
53.6%
|
|
St George, UT
|
$259.2
|
52.8%
|
$257.7
|
51.0%
|
|
Flagstaff, AZ
|
$271.1
|
52.3%
|
$269.2
|
50.3%
|
|
Miami, FL
|
$311.3
|
53.0%
|
$304.0
|
48.0%
|
|
Kalamazoo, MI
|
$120.1
|
-0.6%
|
$121.5
|
-0.5%
|
|
Elkhart, IN
|
$116.4
|
-8.6%
|
$117.6
|
-8.3%
|
|
Grand Rapids, MI
|
$124.2
|
-6.5%
|
$121.1
|
-8.7%
|
|
Fort Wayne, IN
|
$101.6
|
-9.5%
|
$101.2
|
-10.1%
|
|
South Bend, IN-MI
|
$109.1
|
-8.3%
|
$107.3
|
-10.1%
|
