Fitch rating on five states with the most overvalued single family home prices

[GON]

Interesting article and another resource for people like me trying to understand the current and future single family home market.

My assessment stays static, buying a home that is considered overvalued today is still a good buy, as long as it is not in a state or major city with continuous year over year population decline.

Areas with continuous year over year population declines have been some if the best performing real estate markets over the past 18 months, but I suspect a dead cat bounce and these homes may be very hard to sell down the road.

Back to the article, too five overpriced states per fitch research:
Tennessee
South Carolina
Montana
Arkansas
Alabama.

Of note, the above five states have had and are having year over year population growth.

Homes are overvalued in much of the U.S. — with these 5 states leading the list

Home prices are overvalued nationally, according to a new report by Fitch Ratings, led by Southern states.

finance.yahoo.com

 

[BMWTurboDzl]

My guess. People with a lot of equity moving from high cost to low cost states. They pour their "Yankee/California equity" into a new house but the local economy can't easily support the purchase price come time to re-sell as potential buyers with their own "Yankee/California equity" decide they'd rather buy new construction.

 

[IndyIan]

I like the premise of that report, the "sustainable home price", but it seems that location/geography and the local economy is less important now with more people being able to work from home, and more people leaving the city. Comparable homes in my area used to be a 1/3 the big city Toronto prices, but now they are much closer in price, as is rent now too.
Also though, new house builds are now $500k+? approaching $3-400/sqft! No simple homes being built at all... 6+ roof lines, 14 corners on the exterior wall, all for 2000 sqft...?
I guess compared to some of the older $300k houses, which are junk, a new $500k one makes sense, but in the long term I think I'd rather have simpler to construct, well made new $300k house, that won't get a $15k shingle job in 15 years for all the different surfaces and valleys, etc...

 

[CKN]

My guess. People with a lot of equity moving from high cost to low cost states. They pour their "Yankee/California equity" into a new house but the local economy can't easily support the purchase price come time to re-sell as potential buyers with their own "Yankee/California equity" decide they'd rather buy new construction.

Of course there are numerous other places that have seen massive appreciation in home sales...............both West and East of the Mississippi. Not everyone is coming from California. But since California has such a massive population-it does skew that way.

 

[burbguy82]

NC should be #1

 

[gfh77665]

My guess. People with a lot of equity moving from high cost to low cost states. They pour their "Yankee/California equity" into a new house but the local economy can't easily support the purchase price come time to re-sell as potential buyers with their own "Yankee/California equity" decide they'd rather buy new construction.

THIS.

 

[gfh77665]

Interesting article and another resource for people like me trying to understand the current and future single family home market.

Homes are overvalued in much of the U.S. — with these 5 states leading the list

Home prices are overvalued nationally, according to a new report by Fitch Ratings, led by Southern states.

finance.yahoo.com

Keep in mind that is from Yahoo. They are incredibly biased and they use cherry picked statisticts to push some back agenda they have.

 

[mk378]

If someone is buying it, it's not overpriced.

 

[Dave Hess]

I was in Greenville, SC region earlier this year and houses are very reasonable.

SC coast is very, very expensive.

SC two horse towns are very affordable.