Among the top 50 markets, 26 were considered overvalued and only seven were undervalued. Expanding the data out to the top 100 markets, 40 were overvalued, while 32 were at value and 28 were undervalued.
Nationwide, home prices in April increased 6.9% from a year ago and 1.2% compared to March, according to the latest CoreLogic home price index. The Irvine, Calif.-based technology and data provider also revised its original March HPI to account for updated data. Likewise, all 50 states saw home prices rise in April year-over-year.
CoreLogic defines an overvalued market as one where home prices are at least 10% above long-term, sustainable levels. Conversely, an undervalued market is one that is at least 10% below sustainable levels.
“The best antidote for rising home prices is additional supply,” Frank Nothaft, chief economist for CoreLogic, said in a press release. “New construction has failed to keep up with and meet new housing growth or replace existing inventory. More construction of for-sale and rental housing will alleviate housing cost pressures.”
There should be a somewhat slower rate of appreciation over the next 12 months. CoreLogic expects a scant 0.2% increase in national home prices in May from April, and it predicts prices will rise by 5.3% on a year-over-year basis from April 2019. However, some individual local markets may still experience rapidly rising prices, putting them at risk of a housing bubble.
Here’s a look at 12 overvalued housing markets with the largest annual increase in home prices, according to CoreLogic. The April median sales price data is based on estimates provided by CoreLogic. The April home sales count information was aggregated from state and local Realtor associations, multiple listing services, and Trulia.