2008-02-15: Homes in Bubble Regions Remain Wildly Overvalued
But the really bad news is that, even after a year of misery and falling prices, homes in many of these regions still aren't cheap. They remain wildly overvalued compared to average personal incomes.
There is a strong long-term correlation between the two figures. And in many regions, house prices would still have to fall a very long way to get back into line. Just to get down to seven times incomes, prices would have to fall 37% tomorrow.
How far? Try around a third in Florida and Arizona -- and closer to 40% in California.
There is a strong long-term correlation between the two figures. And in many regions, house prices would still have to fall a very long way to get back into line. Just to get down to seven times incomes, prices would have to fall 37% tomorrow.
How far? Try around a third in Florida and Arizona -- and closer to 40% in California.
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