Of particular concern are the figures he quotes on overvalued markets. The numbers, which came from a survey by Global Insight and National City Corp., said that by the middle of this year 236 metro areas had overvalued housing markets. As if that number weren't a concern in and of itself, it's particularly worrysome when put in the context of survey results from early 2000, when only 63 metro areas were judged as being overvalued.
From Samuelson's column:
We are at the endgame for housing. Until recently, our national motto has been "in real estate we trust." Just last week, the Census Bureau reported that median home prices after inflation rose 32 percent from 2000 to 2005. In some places, the gains were huge: 127 percent in San Diego, 110 percent in Los Angeles and 79 percent in New York. But real estate—which has acted as a national piggy bank, with homeowners borrowing and spending against rising house prices—no longer looks so trustworthy. On this, more than falling oil prices or a record Dow, hangs the economy's immediate fate.
— TJ Sullivan in LA
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