CoreLogic Fraud and Flipping Indices Tag 13 Metros as Overvalued

Posted To: MND NewsWire

In the first part of a series of article Market Pulse CoreLogic Principal Economist Mark Liu looked at the possibility that a new housing “bubble” was forming as home prices continue to rise. Liu identified 31 US Core Based Statistical Areas (CBSAs) as overvalued based on the company’s Market Conditions Indicator measuring whether home price increases appear to be outstripping wage increases. He then winnowed out 10 cities where overvaluation was not supported by a too-large home price-to-rent ratio. Figure 1 shows those remaining areas that survived his initial analysis. Liu said that the 21 remaining markets support one part of economist Joseph Stiglitz’s definition of a bubble – that fundamental factors do not justify the price. In the second part of his analysis he tests the 21 remaining…(read more)

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