Housing: Undervalued and Stuck There
December 22, 2009
Wells Fargo & Co. economists wrote in a note to clients last week, "The calculus of homebuying and finance has changed," summing up succinctly something that's troubling housing experts all over the country.
Housing researcher Global Insight recently released a study of U.S. housing prices that points to the magnitude of the collapse of values. Nationwide, Global found housing values were about 10% undervalued, based on a model that examines interest rates, household incomes, population, and historical price patterns.
That's a modest number compared with metro areas hardest hit by the housing recession. In Fort Lauderdale, Fla., Global calculated that housing prices were 24% undervalued as of the third quarter of 2009. Three years ago, it said the area was 44% overvalued. Global calculates that Las Vegas is now undervalued by 41% compared with being 33% overvalued in 2006.
The trillion-dollar question is: When will things turn around? As long as there is high unemployment and tight credit, many experts believe it won't be anytime soon.
Source: Reuters News, Emily Kaiser (12/20/2009)
I hope you enjoyed this article. If you have questions about the real estate market in Jefferson, Clallam or Kitsap Counties I'm only a phone call or email away. I was born and raised in the Pacific Northwest and have been selling real estate for 12+ years. My office is located in the Victorian seaport of Port Townsend. Port Townsend is an vibrant, eclectic and small community on the NE tip of the Olympic Peninsula of Washington State. Only 1.5 to 2 hours from SEATAC airport you are only a couple of hours from flying anywhere in the world. Located in a rainshadow created(so I'm told) by the Olympic Mountains, our little village gets just 15-18 inches of precipitation per year.