Analysis: State’s housing market regains balance

Colorado’s housing market is already beginning its return to appropriate valuation, according a recent housing market analysis.
The analysis, conducted by National City Corp. and Global Insight, reviewed the top 299 metro areas to determine each area’s valuation. Of the seven Colorado metro areas reviewed, all of them where overvalued, but all of them had experienced decreases in the percentage of overvaluation from the previous quarter.
Greeley experienced the greatest percentage point decline with overvaluation dropping from more than 25 percent in the second quarter to 19 percent in the third quarter. The model-estimated value of a Greeley home actually increased to $149,000. However, the amount paid for the average house – $177,000 for the third quarter – decreased, consequently shrinking the overvaluation margin. Greeley ranked 111 of 299 in its housing valuation.
The Fort Collins market reacted similarly. In second quarter, the Fort Collins housing market was 14.9 percent overvalued. That dropped to a 10 percent overvaluation, with the estimated house cost increasing to $202,000 and the actual cost decreasing to $222,000. Fort Collins ranked 156 of 299 in the third quarter report.
Grand Junction was the most overvalued market in Colorado for the third quarter at 31 percent, and ranked nationally at No. 61. The third quarter result was only a slight decline from a 32.5 percent overvaluation in the second quarter.
The least overvalued housing market in Colorado in the third quarter was Pueblo at 5 percent.
The National City Corp./Global Insight Housing Market Analysis determines the estimated house prices by examining population density, relative income levels, interest rates and historically observed market premiums or discounts.

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