New York Metro Area 43% Overpriced
From CNN/Money:
Most overpriced home markets
City/Actual Price/Equilibrium Price/Difference/Rating
Atlantic City NJ $262.9 $186.6 41% Overpriced
New York-North New Jersey NY $431.0 $300.5 43% Overpriced
Philadelphia PA $247.2 $217.9 13% FairValue
Hartford CT $237.2 $224.2 6% FairValue
Most overpriced home markets
After years of local home markets getting more and more overvalued, the trend has reversed, according to an analyis published this week.
Each quarter, Local Market Monitor, which provides research to the real estate industry, assesses 100 markets, comparing selling prices to "equilibrium" values. Company president Ingo Winzer bases those values on local economic and population growth, construction costs, vacancy rates, household income in the area and interest rates.
The number of overpriced markets in the first quarter, defined as having a median home price more than 15 percent higher than equilibrium, fell by two to 38. In the prior quarter, the number of overvalued markets had climbed to 40 from 37.
Winzer says that 56 of the 100 markets he covers are now fairly priced, up from 54 last quarter.
The median home, however, is still overpriced by an average of more than 14 percent, Winzer judges, and homes in many markets are still way too high. This matters because those markets have much more potential for the kind of steep decline that could be disastrous for homeowners - and the local economy.
City/Actual Price/Equilibrium Price/Difference/Rating
Atlantic City NJ $262.9 $186.6 41% Overpriced
New York-North New Jersey NY $431.0 $300.5 43% Overpriced
Philadelphia PA $247.2 $217.9 13% FairValue
Hartford CT $237.2 $224.2 6% FairValue
16 Comments:
43%? That is about how much values went up in the past few years..
What do you consider a "few years"? If we go back to 2000, many homes appreciated by 100%
By Winzer's figuring, Santa Barbara is the most overpriced housing market in the nation (see table below). The median home there costs $567,300, 80 percent more than it should.
The median ASKING price in Bergen county is $639,000 for a SFH, and $445,000 for a condo, $579,000 combined. It seems we are on par with Santa Barbara.
JAY
anon 1:36pm
If a house appreciates by 100% since say 2000 and then loses say 50% of it's value, it gave back ALL of it's paper gains (not realized, thru a sale; ps:refi'ing is not realizing it is going into debt.)
If costs are approx. the same, I would prefer Santa Barbara over New Jersey.
JAY
refi'ing with cash out, of course.
Anonymous said...
If costs are approx. the same, I would prefer Santa Barbara over New Jersey.
JAY
7/26/2006 01:59:27 PM
No you wouldn't.
Don't get me wrong, SB is lovely, but would you really want to have to live in that social continuum?
SoCal ain't where its at.
Chicago, I know what you mean, but you can't beat that weather. Actually, my real preference is Monterey CA.
JAY
Ugh, the whole LA area sucks.
L.A. is a city? Hardly. To me, it is Long Island with bigger buildings, one big sprawling mess with no public transport to speak of and a fraction of the roads they need.
Chicago, NY...now those are cities.
While I love the weather in Cali, the big strike against it is my, perhaps irrational, fear of waking up inder a pile of rubble, or perhaps having my home slide into the ocean or perhaps get taken over by wild brush fires. Other than that it's just dandy.
I'll take Jersey thanks.
Mr. Oliver said...
Chicago, NY...now those are cities.
7/26/2006 05:50:10 PM
When they have power... eecccchhh
Earthquakes are as likely to hurt you in California as icicles falling on your head are in New Jersey.
I agree that So. Cal can't compete with a real city like Manhattan, but we are talking about North Jersey here! Bad traffic, bad sprawl, long commutes AND terrible weather!
43% overpriced, but it requires less than that - about 30% - to drop in order to reach what they feel is equilibrium.
Not that 30% is a joke.
Yeah, Con Ed really farked things up out here. Luckily, we never lost power. However, the entire area around the N stop at Ditmars was out for over a week.
Mr. Oliver said...
Luckily, we never lost power.
7/26/2006 09:43:14 PM
COOL [literally]!
Luckily cat food is canned and doesn't spoil. ;-)
queens,
lovely place to live.
Luckily, Mr. Oliver only knows from dry food, so don't have to have the nasty canned stuff around. Ewwwww.
And, yes Anon @7:08, I agree. Astoria has been a fantastic place to live, one I'll miss much when we eventually move. We've got very reasonable rent, in a safe, vibrant neighborhood with some of the best food in the City and less than a half-hour commute door-to-door.
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