“Some New Math on Homes – New York Times”
Some New Math on Homes – New York Times
Their findings are at odds with other surveys that use the relationship of home prices to income to determine whether home buyers are overreaching. Homes in Orange County, Calif., were fairly priced, the Smiths found. Some cities like Dallas, Indianapolis and Atlanta were screaming bargains. Homes they surveyed in San Mateo County, south of San Francisco, were, however, overpriced by about 54 percent.In a paper the two presented at the Brookings Institution this week, “Bubble, Bubble, Where’s the Housing Bubble?” they said that even though prices had risen rapidly and some buyers unrealistically expected the trend to continue, “the bubble is not, in fact, a bubble in most of these areas.”
A fascinating read, until this part:
Those expectations are far too optimistic, numerous studies have shown, most notably a 2003 study by Mr. Case and Mr. Shiller that found, for instance, that homeowners in San Francisco expected annual price increases of 15.7 percent. “It’s clear a lot of people are nuts,” Mr. Case said.
Uh, hello, this is the Bay Area. Being nuts is a way of life!
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