Housing Reports June/2006:

Overvalued Markets
BusinessWeek Online: by Peter Coy June 12, 2006:

National City Corp., the Cleveland-based banking company, and market researcher Global Insight are out today with the latest edition of their widely watched quarterly report on overvalued housing markets. It finds that 71 markets, representing 39% of the value of single-family homes in the U.S., were "extremely overvalued" in the first quarter of 2006. As recently as the first quarter of 2004, only three markets representing 1% of total home value were considered extremely overvalued. California and Florida account for 17 of the 20 most overvalued markets.


More Housing Markets Overvalued
39% of U.S. housing at risk for falling prices, study says
MarketWatch from Dow Jones: by Rex Nutting June 12 2006:

A growing percentage of U.S. housing markets are "extremely overvalued" and are at risk of falling prices, according to a study based on government data released Monday by Global Insight and National City.

In the quarter, 71 housing markets, representing 39% of all U.S. housing, were deemed to be "extremely overvalued" based on median sales prices, median income, population and historic values.

That's up from 64 markets accounting for 36% of housing in the fourth quarter. In the first quarter of 2004, just 1% of housing was considered overvalued. To be "extremely overvalued," homes had to be valued at least 34% more than "normal." Read complete report.

When prices do fall from overvalued levels, they typically fall by about half the overvaluation, said Richard DeKaser, chief economist for National City. The correction usually takes three and a half years.


House Prices in America
By: Global Insight / National City Corp.

The following are the report's numbers for Naples, Fl.

Quarter ---- Price ---- Over/Under value

1stQ/2006 / $383,000 / +102.6% #1 most overvalued market in U.S.
4thQ/2005 / $367,200 / +93.5% #1 most overvalued market in U.S.
1stQ/2005 / $284,000 / +53.3%
1stQ/2004 / $231,000 / +28.8%
1stQ/2003 / $204,100 / +14.6%
1stQ/2002 / $182,100 / +1.9%

(From: House Prices in America, updated for the 1st quarter of 2006 by Global Insight /National City Corporation / June 2006)

Prepared by Don Hunt, Realtor