Where Housing Prices Are
The Most Likely to Fall
By Lauren Baier Kim
Here’s a look at what’s new in real-estate markets across the U.S. from around the Web. (Some links may require registration or subscriptions.)
Most overvalued U.S. markets
As the housing slowdown continues, which state has the greatest threat of experiencing home-price declines? California, according to a new report by National City Corp and Global Insight, a CNNMoney.com article says. The survey, which determines what housing prices should be using factors such as selling prices, population density, interest rates and income levels, ranks Bend, Ore., as having the most “overvalued” (i.e., overpriced) housing market. Overvalued markets — where housing prices are most likely to fall — tend to be in places that saw big price run-ups during the boom, including California, Florida, New York and Massachusetts, the article says. The survey, which looked at fourth quarter 2006 data for 317 top metro markets, found that 157 of the cities had seen price drops during that quarter. The report ranks Dallas as the most undervalued city in the U.S.; Texas lays claim to four of the most undervalued. For an interactive map of housing markets by median price and valuation, visit National City’s Web site.
Most expensive city
If you’re going to transfer overseas, you might not want to live in Moscow. For the second year in a row, the city has been ranked as the world’s most expensive, according to a survey of 143 international cities by Mercer Human Resource Consulting, the Associated Press says. Contributing to Moscow’s high cost of living is the appreciating ruble, the AP says. London ranked as the next most expensive city, followed by South Korea’s Seoul. An expatriate can expect to shell out $4,000 a month for a luxury two-bedroom apartment in Russia’s capital, the Associated Press says.
It’s elementary
The better the local elementary school, the more house hunters will pay to purchase a neighborhood home, says an article by the New York Times. The article points to a Trinity College study that looked at 8,736 home sales between 1996 and 2005 and compared selling prices against grade-school test scores in 11 school districts in West Hartford, Conn., a blue ribbon school district. The study found that every 12% difference in exam scores for a standardized test taken by Connecticut students in grades three through eight secured a rise in selling price of $5,065, the newspaper says. For example, homes in an area that sends students to West Hartford’s Lloyd H. Bugbee School (where 99% of fourth graders scored at or above proficiency in math, 93% scored as such for reading and 87% scored at that level for writing) tend to sell for more than houses in an area served by the Whiting Lane School, which has lower test scores (87% scored at or above proficiency in math, 66% scored at that level in reading and 68% for writing) — despite the similarity of the two neighborhoods, the article says.
Open House ‘junkies’
Been to an open house lately? If you have, it’s possible you’re not even looking to buy a new home, says an article by the Buffalo News. While 87% of 2004 home buyers found open houses to be “very useful” in their house search — according to data by the National Association of Realtors — some who go to these events aren’t serious house hunters. Instead, they are attracted by the “snoop factor” or are looking to fill their Sunday afternoon, the newspaper says. Open houses can be a way to gauge what’s going on in the neighborhood, or just to see what your neighbor’s kitchen looks like, the News says.
Bogged down in Bay Area
In May, home sales saw a year-over-year drop of 17.4% in the San Francisco Bay Area, reaching the lowest level in 12 years, according to an article by the San Francisco Chronicle. Meanwhile, the median price increased by 5.9% to $720,000, the newspaper says. The price increase doesn’t reflect a rise in home prices, but signals a trend in which more high-end homes are selling than lower-cost ones, the Chronicle says. Local neighborhoods experiencing slower sales include sections of Richmond, Oakland and Santa Rosa, among others, while Belvedere, Tiburon and Cupertino are included in areas seeing increased buyer interest, the paper says.
– Ms. Kim is a senior editor at RealEstateJournal.com.
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– June 20, 2007
