US Housing Could Now Be Undervalued in Some Areas - What About Your Local Market?

Are homes in the United States now undervalued?  Some analysts say that US houses at some markets are now so low and actually undervalued at current price.

 

By the end of 2009, the US housing was 8.9% undervalued when weighted by market value, and 10.3% undervalued when weighted by housing units (according to IHS Global Insight, an international financial analysis and consultancy firm.)

A 9% undervaluation implies that on the average a buyer will pay US $455,000 for a property worth US $500k, based on housing fundamentals. The analysis was based on a study of actual house prices in 300 metropolitan areas from 1985 to 2009.  The fundamental house price value was based on the area's population density, average household income, accessibility, and other factors.  This undervaluation was in contrast to the 16.6% overvaluation in Q4 2005, which was near the peak of the house price boom.

 

Is your local housing market undervalued? 

 

That depends and is hard to say about Orange County, California.  We saw evidence of that bottoming of prices during 2009.  This year we experienced increasing buyer demand for housing, with REO bank owned homes sold quickly and at high prices.  Short sales and homes under $500k continue to dominate, and demand continues to be hot at the lower range where the market is correcting.  Demand for homes over $1 million remains slower.

 

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Harrison K. Long, REALTOR® & broker, Explore Group, Coldwell Banker Previews, Irvine, CA.  CA DRE #01410855.  ExploreProperties@gmail.com.  Lawyer member, California State Bar Association #69137.  National Association of Realtors, California Association of Realtors, and Orange County Association of Realtors.  Current Chairperson of Local Government Relations south committee at OCAR.org.  Newport Beach and Irvine area Realtor, broker agent and property information source. 

Always hire an experienced local REALTOR® to help you with your decisions and sale or purchase of a home and property.

 

 

Posted via email from Explore OC Homes