Humboldt County Surrounded by Most
Overvalued Housing in the Nation
By Erick Eschker
December, 2005
A recent report shows that seven of the twenty most
overvalued housing markets in the nation are in cities near Humboldt County. Those
cities range from Napa
and Sacramento in the south to Bend
and Medford, Oregon in the north.
Redding California is listed at number
seventeen and 56% overvalued. Further,
thirteen of the twenty most overvalued housing markets are in California.
The full list is given below.
Rank
|
City
|
%
Overvalued
|
| 1 |
Naples,
FL |
84% |
| 2 |
Merced, CA |
77% |
| 3 |
Salinas, CA |
75% |
| 4 |
Port St. Lucie, FL |
72% |
| 5 |
Stockton, CA |
72% |
| 6 |
Madera, CA |
70% |
| 7 |
Santa Barbara, CA |
70% |
| 8 |
Modesto, CA |
67% |
| 9 |
Napa, CA |
65% |
| 10 |
Riverside, CA |
65% |
| 11 |
Medford, OR |
64% |
| 12 |
Sacramento, CA |
61% |
| 13 |
Atlantic City, NJ |
59% |
| 14 |
Chico, CA |
59% |
| 15 |
Fresno, CA |
58% |
| 16 |
West Palm Beach, FL |
57% |
| 17 |
Redding, CA |
56% |
| 18 |
Santa Rosa, CA |
56% |
| 19 |
Bend, OR |
56% |
| 20 |
Sarasota, FL |
56% |
Source:
http://money.cnn.com/2005/12/29/real_estate/buying_selling/handicapping_housing_markets/
“House Prices in America”
was written by Global Outlook and National City. They
construct a model of housing prices from
1985 to 2005 which controls for population density, mortgage rates, and
income. A city’s housing market is
“overvalued” if
the actual price of housing is greater than the price predicted by
their
model.
They do not consider Humboldt County
because they don’t have data for the county.
But they show that some of the most overvalued cities in California are
mid sized
cities that are outside major metropolitan areas. The
Humboldt Economic Index
recently compiled
data for Humboldt County and we found that the county P/E
ratio had increased tremendously over the past few years.
Together, these two reports suggest that Humboldt County
housing prices will face a period
of adjustment.