A recent report published by PMI Mortgage Insurance Company tackles the question: “Have House Prices Fallen by Enough to be Affordable Again?” The answer: It depends on what market one is talking about. See The Housing & Mortgage Market Review – March 2011
The fourteen-page report is a good read and, and for you data geeks, is chock full of charts, tables and data broken out by state. As you’ll see Nevada ranks at the top (or bottom, depending how you look at it) of many of the lists presented in the report (i.e. 12-MONTH CHANGE IN PAYROLL EMPLOYMENT; NEW MORTGAGE FORECLOSURES; and SERIOUSLY DELINQUENT MORTGAGE PAYMENTS), but despite topping those lists the report lists Nevada as one of ten states where house prices have over-corrected from the boom and are now very affordable. In coming to that conclusion, PMI looked at CoreLogic’s House Price Index compared with an index of income, both relative to a 1995 base year. Using that formula, Nevada looks affordable again. The other states exhibiting “under-pricing” include: Michigan, Alabama, Georgia, Idaho, Illinois, Missouri, Montana, Nevada, New Mexico, and West Virginia.
Click on the report below to access.
MikeZ
Most importantly, the job market, which had lagged behind the rest of the economy, now is moving forward more strongly.
Pure fantasy.
jade
Shouldn’t the article read : ARE house prices in Nevada over-correcting.
Prices have certainly not corrected yet!
skeptical
Jade,
Not sure what your point is, but in my book, a 50% reduction at all price levels (or more) is a correction … if not a crash.
Will it correct more? Probably. Especially at the high end. However,
it is empirical that RE prices in Reno have corrected. Just ask any homeowner.
Have prices over corrected? We will only know that in the fullness of time.
billddrummer
The job market probably looks better at 30,000 feet.
But then, so does a ghetto.
Reno Dino
How accurate is the Zillow estimate? It’s taken a 10% hit to Reno values in the last 90 days pretty much across the board. Value are back to the late 1990s. High end homes for sale are in complete denial, asking nearly 70% over the Zillow estimate. When will the top end capitulate? Many have the money to hold out, but the market is not coming back any time soon. Marriage counselors must be busy.