Dive Brief:
- Of the 100 metropolitan U.S. housing markets surveyed by CoreLogic, seven are now considered "overvalued." Last fall, there were only four.
- Austin, TX, claimed the top spot on the list, where prices are 39% higher than what CoreLogic believes is a sustainable level.
- Following Austin, the remaining "overvalued" markets are: Houston; Charleston, SC; Miami; Washington, DC; Dallas; and San Antonio.
Dive Insight:
CoreLogic labels a market as "overvalued" when home prices outpace income growth to such a point that markets are unsustainable for residents earning the city's median income.
Texas dominates the list due to its resistance to the last housing market crash. Instead of seeing prices bottom out, Texas' population and market continued to grow as the state's oil and gas industries boomed, according to CNBC.
Despite labeling these metro areas as "overvalued," CoreLogic reports they are still considered healthy markets, rather than bubbles waiting to burst, because they aren't built on easy credit standards —which occurred during the last market crash. Instead, they are fueled by low inventory and demand, which CoreLogic hopes will soon even out to normal levels.
Sam Khater, deputy chief economist at CoreLogic, said of the seven markets, "They can be overvalued, but be active and healthy and not so out of whack that it implies a bust."
