The housing market is continuing to improve, as home prices in 70 of the 100 largest metros stabilize close to long-term fundamentals, the latest Trulia Bubble Watch report suggests.
The online residential real estate site’s Bubble Watch shows whether home prices are over- or undervalued relative to fundamentals by comparing prices today with historical prices, incomes and rents.
The most recent report indicates that home prices nationally were 2% undervalued in the fourth quarter of 2014, while those in 70 of the 100 largest metros are less than 10% over-or undervalued.
“That’s the highest number of markets close to local long-term fundamentals since the recovery began, and a sign that the housing market is becoming more stable and healthy,” writes Jed Kolko, chief economist at Trulia.
In the first quarter of 2006, at the height of the past decade’s housing bubble, home prices soared to 34% overvalued before dropping to 14% undervalued in the first quarter of 2012. In the fourth quarter of 2013, prices looked 5% undervalued.
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Written by Emily Study