While homeowners are naturally pleased to see the value of their property increase, the steady rise in home prices in recent years causes consternation among some economists who fear that homes are overvalued and will eventually need to come down in price.
The CoreLogic Home Price Index and Forecast for September 2017, released this month, found that 24 of the top 50 markets based on housing stock are overvalued.
CoreLogic’s Market Conditions Indicators data defines an overvalued housing market as “one in which home prices are at least 10 percent higher than the long-term, sustainable level.”
Home prices nationally increased seven percent year-over-year from September 2016 to September 2017. CoreLogic forecasts that home prices nationally will rise another 4.7 percent between September 2017 and September 2018.
Among the markets the company considers overvalued are Las Vegas, where prices rose 9.7 percent year-over-year; Denver, where prices rose 8.4 percent; Los Angeles, where prices rose 7.1 percent; Miami, where prices rose 5.5 percent; the Washington, D.C., region, where prices rose 4.6 percent; the New York City and Jersey City region, where prices rose 4.5 percent, and Houston, where prices rose 3.3 percent.
Rising prices don’t necessarily cause a market to be considered overvalued. Three markets where prices rose that CoreLogic identifies as “at value” are Boston, where prices rose 7 percent; San Francisco, where prices rose 6.4 percent, and Chicago, where prices rose 4 percent.
To view the full report, click here.
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