Tags: Humphries | housing | danger | overheated

Zillow's Humphries: Some Housing Markets 'in Danger of Overheating'

By    |   Tuesday, 22 April 2014 02:14 PM

Within a year, home values in more than 1,000 U.S. cities will exceed their pre-2008 levels, according to a new study from real estate information service Zillow.

And that's not an unalloyed good, says Zillow's Chief Economist Stan Humphries,

"On one hand you’re happy that home prices are recovering so nicely," he told Yahoo.

"On the other hand, home values were definitely overvalued in 2006. And the fact that so shortly after the greatest housing recession of the century we’re already seeing a lot of metro areas return to their peak levels is a sign for how robust the recovery is."

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The risk: "some markets are definitely in danger of overheating again," Humphries said.

The S&P/Case-Shiller index of home prices in 20 cities climbed 13.2 percent in the year through January. To be sure, that was the lowest rate since August.

In some cities home buyers are spending a higher percentage of their income on a mortgage than they did in the 15 years before the housing bust, Humphries said. "Broadly speaking, though, at a national level, we think homes are still very affordable."

Meanwhile, existing home sales fell 0.2 percent in March, the third straight monthly decline. "Sales are showing some lingering effects of the weather," Kevin Cummins, an economist at UBS Securities, told Bloomberg.

"It’s probably going to take a couple more months until you see a bounce."

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Within a year, home values in more than 1,000 U.S. cities will exceed their pre-2008 levels, according to a new study from real estate information service Zillow.
Humphries, housing, danger, overheated
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2014-14-22
Tuesday, 22 April 2014 02:14 PM
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