According to a recent study by National City Mortgage, Mpls/St. Paul real estate is 24% over-valued, down from 27% in the last study (30% overvalued is considered ‘significantly risky’.) Good for 84th place out of 299 markets studied. As we’ve noted before, though interesting, these studies use a fairly complicated predictive model, based on a number of subjective factors, to arrive at guess where prices should be, so your mileage may vary.
ยท Most Overvalued Housing Markets [cnn.money.com]
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How much can you really believe crap like this? If they really know what the “undervalued” markets are, then why aren’t they buying up that property like crazy, simply waiting for it to appreciate to where the price “should be” (according to them). Just looking through their website, it looks like they have the capital to handle such a venture. “Real Estate Arbitrage” if you will.
I wouldn’t run out and buy a bunch of properties in DeadWoodDryGulch nowhere Texas based on this guesswork study.
Exactly – there are many factors these studies cannot account for, and most of them are SWAG’s at best.
SWAG = Scientific Wild-Ass Guess
I think they did a pretty good job. Worth considering what they have to say.