News Article From: 06-13-2006
The article, Home prices too high in 71 cities, from the USA TODAY, reports that single family homes in 71 U.S. cities were extremely overvalued in the first quarter of 2006 and at risk of a price correction, according to a report prepared by National City Corp. and consulting firm Global Insight. Many of these cities were in California and Florida. The over-valued rating is based on where home prices should be by looking at factors in addition to price and interest rates, including employment, population density and historical premiums and discounts in cities over time. Naples, Fla., Salinas, Calif. and Port St. Lucie-Fort Pierce, Fla. were the three most over-valued cities. Overall, 17 of the most overvalued markets were in California and Florida. The article gives a link to show all 317 cities in the study. Phoenix showed an average price of $243,000, and was 42.9% overvalued according to the study.