San Antonio ties for most overvalued housing market in the nation
Here's a distinction that will likely make homeowners feel pretty uneasy. On its 2016 list of most overvalued housing markets in the country, San Antonio ties with Austin for first place.
Fitch Ratings did a study for Forbes based on its first-quarter 2016 Sustainable Home Price model, which compares home prices in the 50 largest metro areas against the area's economic fundamentals, including unemployment, income, population, and mortgage rates. With all calculations said and done, the two Texas cities are overvalued by 19 percent, the highest in the nation.
The seemingly nonstop addition of jobs and people moving to fill them is what propels the Lone Star State, even though drops in the energy sector have caused slowdowns in other Texas cities. San Antonio and Austin have also quickly rebounded from the recession, with gross metro product rising 18 percent in Austin and 9 percent in San Antonio through the end of 2014.
Home appreciation in San Antonio has gone up 21 percent since home prices bottomed out in January 2012 (current median price: $190,400). Austin has risen 41 percent since July 2011 (the current median price is $278,000). The home growth price in both is outpacing the rest of the local economy.
It's on trend with the rest of the West and Southwest, where the majority of overvaluation is happening, thanks to those areas being able to quickly clear out a backlog of properties since the recession. Phoenix, Las Vegas, and San Francisco round out the top five.
The Northeast is experiencing the opposite problem, with the five most undervalued markets showing up there. New Haven, Connecticut, is the lowest, followed by Detroit; Hartford, Connecticut; Providence, Rhode Island; and Cleveland.
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