A recent study of the top 99 real estate markets found that one-fifth of the housing stock was overvalued by at least 20%.
The economics division of National City Corp., the financial holding company that conducted the study, first examined what housing prices in these areas should be and then compared that with actual prices. Any market with a premium of 20% or larger they termed a “bubblette.” These markets were then deemed a higher risk for price correction.
California had the highest premiums, and Las Vegas, Portland, Ore., Miami, and Detroit were among the other “bubblettes.”