One of the more interesting bits of housing data I’ve seen lately comes from a nationwide study suggesting the broader Kansas City housing market is fairly valued, and may in fact be slightly undervalued.
Global Insight and National City Corp. jointly analyzed 330 metropolitan areas across the country at the end of 2007, covering 78 percent of the nation’s housing units. Notably, their methodology goes beyond pricing to include interest rates, local household income and population trends, and historic premiums or discounts for each market.
The study found 23 markets to be “overvalued,” including Miami, which it estimated to be 43.1 percent over its estimate of fair value. An additional 60 markets were deemed to be “moderately overvalued,” including Las Vegas, which it deemed to be 17.9 percent over fair value.
The vast middle of 221 “fairly valued” markets included Kansas City, which was estimated to be 6.8 percent below the statistically estimated fair value. And finally, 26 markets were labeled “undervalued,” most notably Dallas, which was estimated to be 30 percent below fair value.
Bottom line: Boom times are gone, folks. Now we’re groping for stability. And we’ll find it — eventually.
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