As fast as some areas jumped in value, we have seen them decline and decline and almost fall of a cliff. However, some areas here in No Cal have fallen so far that according to Local Market Monitor, a real estate forecasting and risk assessment firm headquartered in Cary, North Carolina, that prices have over-corrected to the point that now, housing in these markets is considered to be “undervalued.”
Undervalued here in the Bay Area? Thanks to this crazy housing market this Local Market Monitor finds Merced, California to be the most undervalued market in the US. Okay, Merced isn’t exactly in the Bay Area but we’re geographically generous. In this Central Valley city, the company reports actual home prices average $128,413 – a whopping 32 percent below the city’s equilibrium price of $188,974.
No need to rush out to Merced with a small wad of cash as the Local Market Monitor forecasts residential property values in Merced to remain undervalued for a while, increasing just 1 percent over the next 12 months, giving back that 1 percent over the following 12 months, then holding flat with 0 percent change over the 2013 calendar year. Since the market peaked in the second quarter of 2006, the data shows that home prices have fallen by 62 percent.
The Bay Area also has the honor of an entrant in the 10 most overvalued housing markets the San Jose-Sunnyvale-Santa Clara area showing a 19% percentage overvalued.