The report says that home prices are overvalued by 16 percent relative to economic fundamentals like income growth. Income has grown 18 percent since the last recession while home prices have soared 62 percent above their post-recession bottom. Prices are also 10 percent above their previous 2005 peak, before the last crash. Prices are growing faster than they did during the 2003-2006 housing boom. In fact, the report notes that the last time prices grew this quickly was during the dot-com boom from 1997-2000. Area home prices fell 10 percent in real terms when that bubble burst.
· Gasp: SF’s Housing Market is Not That Overvalued After All [Curbed SF]
· U.S.: RMBS Sustainable Home Price Report [Fitch Ratings]
· San Francisco Home Prices Climb to Unsustainable Levels, Fitch Ratings Says [SF Business Times]