June 14, 2006
Bottoming Out In 2009?
According to a study by Global Insight/National City, San Francisco has gone from being “fairly valued” in 2001 (well okay, 4.8% overvalued) to being over-valued by 40.8% in 2006. Interestingly enough, that doesn’t even put us in the “Top 50” of “over-valued” metro areas (Naples, Florida leads the nation at 102.6%). And it's nothing we haven’t heard before.
One new twist, however, is that based on a “historical examination of 66 actual metro area price corrections” (including a drop of 11% in San Francisco from 1990-1994), the study suggests that when/if "prices do fall from overvalued levels, they typically fall by about half the overvaluation” but that a “correction usually takes three and a half years.”
∙ Global Insight/National City Study: House Prices in America – pdf [globalinsight.com]
∙ More housing markets overvalued [MarketWatch]
First Published: June 14, 2006 11:27 AM
Comments from "Plugged In" Readers
OK, a drop of 11% from 1990-1994 -- did everyone forget what caused that drop? Remember that big earthquake in October 1989?
Posted by: saltysoo at June 20, 2006 10:54 AM
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