Mortgage Rate News

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The housing market remains mostly sluggish, but in some places things are picking up. However, there are still real estate markets that could fall. But not very many. In fact, many cities are turning out to be undervalued, according to a ranking done by CNN Money. Clearly foreclosure and other factors are taking their toll. CNN Money reports on some of the most overvalued and undervalued markets in the nation:

Atlantic City, N.J., is now the most overvalued metro area in the nation. At 30.2% over fair market, it is the only city in the dangerous 30%-plus category. Almost at that cutoff is Wenachee, Wash., at 28.9%. The third most overpriced area is Ocean City, N.J.

The most undervalued market is Las Vegas, where homes sell for 41.4% below fair market, followed by Vero Beach, Fla. (-39.8%), Merced, Calif. (-37.7%), and Cape Coral, Fla. (-36.8%).

These judgments are determined by comparing median home prices, local interest rates, population densities and income, plus historical premiums or discounts that areas have exhibited over time.

San Diego, for example, with its great weather and outdoor lifestyle, usually carries a premium, while prices in cold Rust Belt cities such as Detroit generally sell for less than its income stats would suggest.

Clearly, a lot goes into what constitutes a “good deal” in real estate. Location, local amenities, history and more go into evaluations of whether or not people are interested in living in an area.

Personally, I think that my little corner of the world, the housing market is probably pretty close to being properly valued. We didn’t have a huge drop like other areas did, and we aren’t recovering very rapidly, either. That’s because this is a family friendly hideaway in northern Utah — a place where kids try and stay when they grow up. It is not uncommon to see three generations living within a few miles of each other here. And more people continue to move here and set up businesses (which is why this metro area consistently has high marks for job availability and employment).

In the end, it’s largely about perception. Look around your city. What’s the real estate perception in your home town?