Home prices are overheating again. In fact, twice as many metropolitan markets were considered “overvalued” in the second quarter of this year as compared to the first three months, according to a new report from CoreLogic. That is, prices are inflated relative to incomes. This is not, however, a “housing bubble,” because by definition, an economic bubble eventually bursts, and home prices are very unlikely to fall.
“Just because you’re overvalued doesn’t mean that you’re in a bubble or there is an impending crash. Some markets are overvalued because of strong fundamentals,” said Sam Khater, CoreLogic’s deputy chief economist.