Is your house at risk of being overpriced in todays market? There is a new tool out that tries to quantify the numbers and determine which markets have the greatest risk in them.
But a group of economists in the business of assessing financial risk have come up with a new statistical tool to detect exactly that kind of real estate price bloat. It’s called the Valuation Index, and it was released Tuesday by PMI Group of Walnut Creek, Calif., one of the largest insurers of home mortgages.
This forcasting tool, and it is only a tool, looks at the housing market and assesses the risks involved for mortgage and insurance companies. The areas of the country that have the greatest risk are in the western parts of the country. .
But it’s far from the most overvalued region in the country. That distinction goes to — you guessed it — California’s frothiest areas, including Los Angeles (33.7 percent overvalued), San Jose (26.5 percent) and San Diego (22.3 percent). In the Southwest, houses in Las Vegas are 25.5 percent overvalued, according to PMI, and homes in the Phoenix-Scottsdale area are 22 percent overpriced. via the Waxhington Post
So if you are looking to see how your region is doing in this metric, read the report at the PMI Institute.
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