Home News Housing correction coming to Alabama: See the state’s most overvalued real estate markets

Housing correction coming to Alabama: See the state’s most overvalued real estate markets

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The era of high house prices may be coming to an end.

Economic research firm Moody’s Analytics released a report last week that the U.S. housing market is ‘more overvalued than ever’, and U.S. home sales have been falling for years, with house prices outpacing wages. After a fast rise, it is expected to “flatten out” next year.

Chris Delitis, Deputy Chief Economist at Moody’s Analytics, said: “Home prices are expected to fall 5-10% nationwide as rising mortgage rates push millions of would-be buyers out of the market.”

The firm analyzed home prices in the national real estate market and compared them to “base values” calculated using property and income trends in specific areas. Markets where actual home prices exceed the home’s estimated base value by 20% or more are considered “highly overvalued.”

In Alabama, seven of the 12 housing markets Moody’s surveyed were found to be grossly overvalued, but deRitis said it could get even worse.

“Alabama’s overvaluation is not as high as in other parts of the country, which should lead to a more gradual adjustment,” Derritis said in an email. ”

Huntsville is Alabama’s most overvalued housing market, with homes in Rocket City being 37.12% overvalued relative to income levels in the area.

But if you think it’s high, don’t look up. According to Moody’s estimates, the Nashville-Davidson-Murfreesboro-Franklin, Tennessee market is 63.1 percent overvalued, making him his second most overvalued major market in the country after Boise, Idaho. It’s a metropolitan area.

In Alabama, Gadsden is the second most overrated at 31.59%, followed by the Daphne-Foley-Fairhope area at 28.53%.

The Montgomery metropolitan area is actually rated 2.48% undervalued, making it one of the few metropolitan areas in the country to receive that rating.

Here’s a complete list of Alabama’s metro overrateds (source: Moody’s Analytics):

market overestimated percentage
Huntsville 37.12
Gadsden 31.59
Daphne Fairhope Foley 28.53
Birmingham-Hoover 23.50
Florence Muscle Shoals 23.15
Decatur 23.11
Anniston – Oxford – Jacksonville 21.37
Tuscaloosa 18.71
mobile 18.06
Auburn Opelika 14.79
Dothan 8.12
montgomery -2.48

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