Trulia Trends
Home prices now look 3% undervalued compared with long-term fundamentals. Of the 100 largest metros, 76 are undervalued while just 7 are more than 10% overvalued.
Trulia’s Bubble Watch reveals whether home prices are overvalued or undervalued relative to their fundamental value by comparing prices today with historical prices, incomes, and rents. The more prices are overvalued relative to fundamentals, the closer we are to a housing bubble – and the bigger the risk of a future price crash. Sharply rising prices aren’t necessarily a sign of a bubble; a bubble is when prices look high relative to fundamentals.
