America's Most Undervalued and Overvalued Cities
Las Vegas is one of the most undervalued housing markets in the nation.
Sin City recently drew a rating of "Frankly Dangerous" -- the worst possible -- from Local Market Monitor, a North Carolina-based firm that provides investors with analysis on local conditions. The only other city to get that kind of thrashing was Orlando, Fla.
Nationally, the great majority of housing markets are now fairly valued, according to Local Market Monitor. Eight markets are overpriced, and 15 are underpriced. That contrasts with the boom years: In mid-2006, 37 of the biggest markets were overpriced, six under and 57 fairly valued.
Las Vegas received a paltry rating even though median home prices there are less $145,000, which is more than half of what they cost at the peak of the bubble and nearly 30% less than what Local Market Monitor calculates would be an "equilibrium price," or fair market value.
The equilibrium price is based on economic and population growth, construction costs, vacancies, household income and interest rates with an "X Factor" thrown in. That's a value company founder Ingo Winzer comes up with based on 20 years of market data.
The X Factor is a mathematical constant, unique for each metro area, that represents the premium or discount that buyers have paid for local homes in the past. It captures the tendency for buyers to pay more for homes in what they consider more desirable locations.
A city like San Diego, for example, with its enviable weather and ocean-side location, commands more of a buyer's premium than does, say,Buffalo, N.Y.
The factors that make Las Vegas's rating so negative mostly revolve around issues of employment, according to Carolyn Beggs, COO of Local Market Monitor. "Las Vegas has a high concentration of jobs in sectors such as manufacturing and construction, which are considered volatile," she said.
She contrasts that with the Stockton, Calif., housing market, where home prices are nearly 20% under the equilibrium price, but which the company rates as an average risk. "Stockton has a higher concentration of jobs in healthcare, education and government," Beggs said.
Both Las Vegas and Orlando have a glut of homes for sale, thanks to years of overbuilding during the housing bubble. They're also two of the hardest hit foreclosure cities and have suffered outsized price declines, with Vegas values down 52% from their peak and Orlando 39%.
Most crucially, the economies of both cities have a heavy reliance on development, which has taken a huge hit in both places.
The most overvalued area right now is the Long Island, N.Y., counties of Nassau and Suffolk, which are suburbs of New York City. The current average home value there of about $418,000 is 26% higher than the equilibrium value of $318,000.
Even so, Local Market Monitor still gives it a "Typical Risks/Rewards," rating, an average score. One particular positive factor there is a bright economic picture with unemployment at only 6.9% and some job growth expected this year.
Other overpriced markets include Los Angeles and Portland, Ore., both overvalued by 24%, and Santa Ana, Calif., 23%.
Akron, Ohio, is the second most undervalued market at -22% followed byCleveland and Warren, Mich., at -21%. 
| City | Median home price | % overvalued for 2011 | % overvalued for 2012 |
|---|---|---|---|
| Nassau-Suffolk, N.Y. | $418,416 | 26% | 27% |
| Los Angeles | $368,056 | 24% | 25% |
| Portland, Ore. | $240,912 | 24% | 23% |
| Anaheim, Calif. | $449,396 | 23% | 25% |
| Edison, N.J. | $286,900 | 20% | 20% |
| San Jose, Calif. | $511,186 | 19% | 22% |
| New York, N.Y. | $403,408 | 17% | 17% |
| Poughkeepsie, N.Y. | $236,016 | 16% | 16% |
Categories: news
Tags: overvalued land undervalued home prices over valued home prices las vegas real estate protech procor
Hi, I must say that you have made some good points in the post. I performed searches on the topic and found most people will agree with your blog. Thanks for sharing this information.
Reply to this
Hi, I must say that you have made some good points in the post. I performed searches on the topic and found most people will agree with your blog. Thanks for sharing this information.
Reply to this
This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality information. Thanks for sharing.
Reply to this
Hi, I found your post really helpful. It helped me all the way in completing my assignment, I am also giving a referance link of your blog in my case study. Thanks for posting such informative content. Keep posting.
Reply to this
Hi, The topic that you have discussed in the post is really amazing, I think now I have a strong hold over the topic after going through the post. I will surely come back for more information.
Reply to this
This is a really good read for me. Must admit that you are one of the best bloggers I have ever read. Thanks for posting this informative article.
Reply to this
We are a group of volunteers and starting a new initiative in a community. Your blog provided us valuable information to work on. You have done a marvelous job!
Reply to this
Pretty Interesting post. Could not be written any better. Thanks for sharing!
Reply to this
You made some good points .I did a little research on the topic and found that most people agree with your blog. Thanks.
Reply to this
That's great, I never thought about how much wine should you buy for a party like that before.
Reply to this
I really like following your blog as the articles are so simple to read and follow. Excellent. Please keep up the good work. Thanks.
Reply to this
I have wished to publicate something like post on my blog and you gave me nice idea. Thank You!
Reply to this
Good post! thank you
Reply to this
Hi, I must say that you have made some good points in the post. I performed searches on the topic and found most people will agree with your blog. Thanks for sharing this information.
Reply to this
First of all, I would like to appreciate the choice of theme that you have chosen for your blog, it looks perfectly wonderful. Now, coming on today's post I must say that you have explained the subject in a concise manner that makes it easily understandable. Thanks for this information.
Reply to this
First of all, I would like to appreciate the choice of theme that you have chosen for your blog, it looks perfectly wonderful. Now, coming on today's post I must say that you have explained the subject in a concise manner that makes it easily understandable. Thanks for this information.
Reply to this
Wonderful post! I like your blog, and am a regular follower. I will be back monday!
Reply to this
Thanks for providing such a great information, I found a lot of informative stuff in your article. Keep it up. Thank you.
Reply to this
Hello,I love reading through your blog, I wanted to leave a little comment to support you and wish you a good continuation. Wishing you the best of luck for all your blogging efforts.
Reply to this
This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free.
Reply to this
It's good article. as we are in a very advanced generation so we should use new technology and application for each and every thing.
Reply to this
Hi, The topic that you have discussed in the post is really amazing, I think now I have a strong hold over the topic after going through the post. I will surely come back for more information.
Reply to this
Hi!
Do you not think about the environment? Let's work on renewable energy?
What can you offer in terms of advertising?
Reply to this
I unquestionably appreciated it reasonably much.thank you so a great offer for sharing.I concur with nearly every one of what you are stating here. preserve it up.
Reply to this
you explained the topic very well. The content has provided meaningful information thanks for sharing this..
Reply to this