Concerns over the next housing bubble have recently been, well, bubbling up. That's why Trulia has a Bubble Watch, to determine whether home prices are overvalued or undervalued relative to their fundamental value. They recently found that national home values are currently undervalued by about 3%, which is great news for those worried about a bubble bursting.
Here in Seattle, though, our homes are actually 1.48% overvalued and asking prices have risen roughly 10% from this time last year. That's still way low compared to markets such as Orange County (17% overvalued), Honolulu (15%) and Los Angeles (15%). Tacoma, meanwhile, is riding the national trend and seeing homes undervalued by roughly 10%.
The point, according to Trulia, is that regardless of local values, housing prices are increasing at a slower rate than they were in years past, suggesting that there's no bubble on the way. Cool? Cool.
· Bubble Watch: Home Prices Still Undervalued, But Not For Much Longer [Trulia]