What Did We Know and When Did We Know It?

Real Estate Broker/Owner with Fred Pickard Innovations Realty Inc

What did we know and when did we know it?

I was going through my old Blogger blog earlier today and came upon this post written almost four year ago (Feb 22, 2005). It was back when I worked in Palm Beach County Florida and referenced a study by National City Bank (now part of PNC Bank) published that month. Unfortunately, the link below will now take you to current study (3rd Quarter 2008) but it is an interesting look at housing values.

There was plenty empirical and anecdotal evidence four years ago that the market could not sustain the growth of the prior few years, but most people in the biz (and the general public) were not ready to believe.

Blog Post from February 22, 2005 below    http://tinyurl.com/c8qdhw

The Housing "Bubblette"

There's been a lot published recently about the possibility of a housing bubble that will burst and leave people with negative equity in their homes. Can it happen? Has it happened before? The answer is yes and yes. Japan has had a slow housing market for the past seven or eight years so any economy is susceptible.

The economics department of National City Corporation, a large financial institution, did a study to try to identify in the 99 largest US markets where single family home valuations are at a premium or a discount. And good old Palm Beach County per the study is 26% overvalued per the benchmarks used. All of the markets that were more overvalued were in California. Also highly overvalued in Florida were the Miami Ft Lauderdale and Sarasota markets. Big markets like Orlando, Tampa and Jacksonville were basically neutral. The most undervalued, Memphis and Salt Lake City.
You can read the entire study at http://www.nationalcity.com/economics

Comments (2)

Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

HA!  I believed it could happen.  Sold my house in Bethesda in May 2005.  Took my equity out and built a home in the country. 

My present home has lost significant value, but this is the one I want to keep for many years. 

The signs were there.  Appreciation ceased in my area about June 2005.  We stopped selling homes to transferring military because I knew that they would lose their shirt if they got transferred in 2-4 years. 

It has been a rough market in the past 3-4 years.

Feb 13, 2009 07:38 AM
Maureen McCabe
HER Realtors - Columbus, OH
Columbus Ohio Real Estate


I love your blog... love some ot the titles, particularly:


I used to pay attention to those National City reports.  I probably blogged about them.  We were always undervalued in our market. 

Feb 13, 2009 09:03 AM