Is Central Arizona's Housing Market Overvalued?

I, think not...

The Arizona Republic reports that the Phoenix region has landed on a list of extremely overvalued housing, but it's unlikely that the situation will lead to meaningful drops in home prices, several local housing analysts said.

The list was compiled by Global Insight and National City Corp., a Cleveland-based mortgage lender. Phoenix ranked 55th among 299 metro areas for overpriced housing.

Based on price-to-income ratios, the analysis estimated the Valley to be 35 percent overvalued. Markets determined to be overvalued by 30 percent or more were considered "at risk".

But the Valley's strong income gains and population growth make it unlikely that home prices will drop much in the near term, according to Richard DeKaser, chief economist with National City Corp.

***R.L. Brown stated "I would disagree with the premise we're overvalued in the literal sense of the word. The consumer doesn't think so or they wouldn't be standing in line to buy houses."

****Elliott Pollack states "What we have now is a severe supply-demand imbalance that created a frenzy. The frenzy is now over." More...