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Market analyst says U.S. home prices still undervalued

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Home prices in the U.S. are still undervalued, placing the real estate market “far from bubble territory,” a market analyst said on Tuesday.

Trulia chief economist Jed Kolko said that home prices in the United States are three percent undervalued during the second quarter of 2014.

During the same period a year ago, prices were eight percent undervalued. Meanwhile, home prices were five percent undervalued in 2014 Q1.

Kolko noted that during the first quarter of 2006, home prices were overvalued by 39 percent, marking the start of a housing bubble. The prices dropped significantly by the end of 2011 to being 15 percent undervalued, he added.

“At this pace, home prices nationally should be in line with long-term fundamentals, that is, neither over- or undervalued by the last quarter of 2014 or the first quarter of 2015,” he said in his article.

“The good news for bubblephobes is that price gains are now slowing down while prices still look slightly undervalued. We’d be at greater risk of heading toward a bubble if price gains were still accelerating, but they’re not,” Kolko concluded.

Kolko based his analysis on data from the Trulia Price Monitor, and “price-to-income ratio, price-to-rent ratio, and prices against long-term trends.”

Forbes.com cited Las Vegas, Chicago, Atlanta, Detroit and Orlando as the top five undervalued housing markets, utilizing data from Fitch Ratings. As for top five overvalued markets, the web site cited San Diego, Washington, Los Angeles, San Francisco and San Jose.

Trulia.com is one of the popular online destinations among real estate industry professionals and buyers for market insight. According to its website, Trulia provides a detailed look on real estate market trends in local communities and states to help sellers, buyers and renters make the right decisions.

Trulia is also a place where real estate brokers and even educators can grow their audience and offer expert advice to fellow real estate professionals. Trulia is a direct competitor of Zillow and Realtor.com.

One new entrant that is poised to grow in the same space is RealBiz Media (OTC: RBIZ). Its primary product, Nestbuilder, a microsite where real estate professionals can connect with potential customers and put up interactive listings, has already started to gain traction in the niche. According to the company’s website, over 350,000 members are already using Nestbuilder to create and syndicate video listings, as well as to network with experts in the field.

RealBiz Media is a publicly traded company that offers its stocks over-the-counter. The company’s stocks closed at $0.15 on Friday.

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