Another opinion on Baltimore-area housing values
One more volley in the debate about home prices: IHS Global Insight suggests in a new report that housing in the Baltimore metro area is pretty close to fairly valued.
The economic forecasting firm says its number-crunching, which takes historical values into account, puts prices in the Baltimore metro area at 2.9 percent overvalued at the end of last year. That's within IHS Global Insight's margin of "historically normal."
By contrast, the metro area was 11 percent overvalued last summer and 26 percent overvalued at the peak of the housing frenzy in 2005, the company says.
According to the report, out this week:
Extreme overvaluation is now essentially nonexistent. Only Atlantic City, New Jersey met our definition for extreme overvaluation during the fourth quarter, a sharp contrast to 2005 when 52 metro areas were judged to be extremely overvalued. For the country as a whole, the housing market is slightly undervalued. When the 330 metro areas are weighted by market value, the nation is 8.4% undervalued. When weighted by housing units, the nation is 10.2% undervalued.
What numbers did the company crunch to come up with this evaluation, you ask? OK, fine, maybe you're not asking, but here's the answer anyway:
Our approach to determining statistically normal house values considers not only house prices and interest rates, but household incomes, population densities, and any historical premiums or discounts metropolitan areas have exhibited over time.
I'm getting the sense from agents and house-hunters that price range matters when it comes to sorting out whether values (or at least asking prices) are fair. One reader commented on yesterday's post about home prices vs. incomes: "We still feel priced out of the market and have been looking to buy a home in the $320K range."
Are there price ranges where the homes seem undervalued? Or where many of the properties on the market seem overpriced? And what -- as Goldilocks would say -- seems just right?