”Survey says” examines a variety of rankings and scorecards for rating geographic areas, suggesting that these scores are best viewed as a combination of art and statistics.
By one criteria, Los Angeles and Orange Counties offer the nation’s 12th greatest homebuying “deal.” Is it possible to have an inland empire? The metropolis ranked 50th out of 100.
Source: This is the first in a series of monthly studies comparing current housing prices in major cities to historical patterns. Professors from Florida Atlantic University and Florida International University analyzed Zillow data dating back to 1996 to calculate home values for single-family homes, townhomes, condominiums, and cooperatives.
According to this calculation, homes in the Los Angeles-Orange County metro sell for 5.4 percent more than their historic worth as of July. On this rating, just 11 metros had more buyer-friendly pricing.
Prices plummeted to the center of the pack in Riverside and San Bernardino counties, with Inland houses estimated to be 20.4 percent overvalued.
Honolulu, at 4.9 percent undervalued, was the best housing deal, followed by Virginia Beach, 2.5 percent, Baltimore, 1.7 percent, New York, 0.8 percent, and Baton Rouge, 0.4 percent.
Worst deals? Boise, with eye-catching 81% “premium” pricing; followed by Austin, 51%, Ogden, 50%, Provo, 46% and Detroit, 46%.
In this valuation analysis, how did other California markets fare?
Ventura County, at 7.4% overvalued, was the No. 15 “bargain” in the United States. Then there was…
No. 17 San Francisco: 8% overvalued.
No. 22 San Jose: 11.2% overvalued.
No. 32 San Diego: 14.9% overvalued.
No. 41 Bakersfield: 16.8% overvalued.
No. 45 Fresno: 19.6% overvalued.
No. 60 Sacramento: 23% overvalued.
No. 91 Stockton: 38.5% overvalued.
This statistic is clearly aimed at the expected investment value in present markets, rather than any concerns about relative “affordability.” Financial needs may be one of the reasons why low-cost regions like Boise are so overpriced, according to the study’s authors.
“Potential purchasers might want to consider renting and reinvesting money that they would have put into homeownership,” Ken Johnson, an FAU real estate economist, said of the most expensive metros. In terms of wealth creation, renting and reinvesting has been demonstrated to beat ownership.”
It’ll be fascinating to see if this metric holds up over time.