Housing prices in four of the country’s largest cities – including Miami – have been deemed overvalued, potentially setting the stage for another housing market bubble. Prices for homes in Miami, Houston, Washington, D.C. and Denver are now considered too high for long-term sustainability.
That’s according to a new report from CoreLogic, which contrasts current home prices to what are known to be viable in the long term, weighing elements like local disposable income. A market is considered “overvalued” if prices of homes are at least 10 percent above what is deemed to be that sustainable mark. In this most recent analysis, none of the top 10 markets were deemed undervalued, as they were just a few years ago, following the housing crisis. Six were considered “at value.” But Miami was among those in the top 10 considered overvalued.
Market researchers say affordability is going to be an ongoing challenge in the years to come, until either more houses are built (increasing the supply) or there is another bursting bubble and prices fall again. Continue reading