U.S. home prices still undervalued by 3 percent

Windsor Genova – Fourth Estate Cooperative Contributor

San Francisco, CA, United States (4E) – Home prices in the U.S. are still undervalued by three percent during the second quarter indicating that the real estate market is “far from bubble territory,” according to a market analyst.

The undervalue was lower compared to 5 percent in the first quarter and 8 percent a year ago, said Trulia (NYSE:TRLA) chief economist Jed Kolko.

During the first quarter of 2006, home prices were overvalued by 39 percent, marking the start of a housing bubble, Kolko said. The prices dropped significantly by the end of 2011 to being 15 percent undervalued, he said.

“The good news for bubble phobes is that price gains are now slowing down while prices still look slightly undervalued. We’d be at greater risk of heading toward a bubble if price gains were still accelerating, but they’re not,” said Kolko in an article published in Trulia.com. “At this pace, home prices nationally should be in line with long-term fundamentals, that is, neither over- or undervalued by the last quarter of 2014 or the first quarter of 2015.”

Kolko based his analysis on data from the Trulia Price Monitor, and “price-to-income ratio, price-to-rent ratio, and prices against long-term trends.”

Meanwhile, Forbes.com cited Las Vegas, Chicago, Atlanta, Detroit and Orlando as the top five undervalued housing markets based on data from Fitch Ratings. As for top five overvalued markets, the web site cited San Diego, Washington, Los Angeles, San Francisco and San Jose.

Trulia.com is one of the popular online destinations of real estate industry professionals and buyers for market insight. According to its website, Trulia provides a detailed look on real estate market trends in local communities and states to help sellers, buyers and renters make the right decisions. It is also a place where real estate brokers and even educators can grow their audience and offer expert advice to fellow real estate professionals.

Other influential real estate portals are Trulia competitors Zillow and Realtor.com. A new entrant that is poised to grow in the same space is RealBiz Media (OTC: RBIZ). Its primary product, Nestbuilder, a microsite where real estate professionals can connect with potential customers and put up interactive listings, already has more than 350,000 members are already using Nestbuilder to create and syndicate video listings, as well as to network with experts in the field.

RealBiz Media is a publicly traded company that offers its stocks over-the-counter. The company’s stocks closed at $0.15 on Friday.

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