A recent report on the housing market across the country from Global Insight and National City contains some interesting bits that are worth noting:
Extreme overvaluation is now essentially nonexistent. … For the country as a whole, the housing market is slightly undervalued.
…
Only the Pacific Northwest remains overvalued across a wide region.
Their analysis is based on population density, mortgage rates, incomes, and a “constant” for each city, that is roughly equivalent to the concept of desirability that we have discussed on these pages numerous times in the past.
Since they are claiming that most of California is already “fairly valued,” I think their analysis tends to lean somewhat in favor of more expensive housing. So while I can’t say I agree with their analysis 100%, I do find it interesting / amusing that the Pacific Northwest now sticks out like a sore thumb in their nationwide analysis.
You can play around with their nifty interactive map, read the full report, or check out the methodology pdf.
Update: Changed the map image above to the one directly from the pdf report, since the National City website is serving up different versions of the interactive map in a seemingly random fashion.