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Coming in at number one for the most over valued real estate is…..”drum roll please”……. Naples Fla. Eighty four percent of homes in Naples were valued over a fair market price, according to statistics by Richard Dekasser of National City Group in 2006. The local chamber of commerce along with local real estate agents dispute this report (imagine that). Now, four years later Naples real estate sells for a thirty percent discount. The average homes in 2006 were selling for $ 380,000 and are now valued around $ 150,000 are the statistics gathered in 2010 from National City Group.  Real estate in 213 cities was considered over valued in 2006, now just 87 cities are considered over valued. What a difference four years can make.

Today Atlantic City Nj is the most over priced city in the US at 30.2 percent over fair market value. A close second place, coming in at 28.9 percent is Wenatchee Wa. The third most over priced city is Ocean City Nj. Las Vegas on the other hand, currently has the most under priced real estate in the country at 41.4 percent under market value. Looking for a good place to invest in real estate? Las Vegas might be the place for you to get the best ROI (Return On Investment) with the most under priced houses in the country. Don’t like Vegas? That’s ok neither do I, how about Vero Beach Fla? Vero Beach has the second most under priced homes in America at 39.8 percent. Third is Merced Ca at 37.7 percent followed by Cape Coral Fla at 36.8 percent.

All of these statistics were determined by local interest rates, comparing median home prices, population income and densities over time. Location. location, location, is also an important factor when determining value. For example, a house in downtown Detroit doesn’t have the same appeal as say a house in San Diego Ca. San Diego has great year round weather and beaches and Detroit has bitter cold winters and no beaches. Research shows that when you get a housing bubble burst, you just don’t go back to normalcy, you go beyond to undervaluation. Some reasons for this are due to builders making huge profits in  area run ups. They start making these profits and the builders over build resulting in an excess of inventory that brings down the price of real estate (supply and demand). Also, psychologically, people lose confidence in the market and stop buying homes when they see or experience the drastic drop in the  value of real estate. Four years ago, mortgage companies  were writing mortgages to anyone and everyone who wanted a home whether they could afford it or not. Now lenders aren’t approving these mortgages and are much more restrictive than before due to the colapse in the economy. All of these factors contribute to less people buying realestate, thus driving the price of homes down.

Here’s a list illustrating the most over valued homes in 2006 and 2010.

Metro areaMedian home pricePercent overvalued 2010Percent overvalued 2006Atlantic City, N.J. $ 232,100 30.2%59%Wenatchee, Wash. $ 240,900 28.9%13%Ocean City, N.J. $ 294,800 26.6%47%Longview, Wash. $ 184,700 22.3%24%Honolulu, Hawaii $ 605,300 21.9%31%Asheville, N.C. $ 172,900 21.8%24%Portland, Ore. $ 267,600 20.8%35%Bellingham, Wash. $ 280,200 20.0%43%Corvallis, Ore. $ 266,400 18.9%14%Salem, Ore. $ 201,000 18.2%25%Source: PNC Financial Services and IHS Global InsightMetro areaMedian home pricePercent undervalued 2010Percent undervalued 2006Las Vegas, Nev. $ 129,700 -41.4%38%Vero Beach, Fla. $ 123,300 -39.8%54%Merced, Calif. $ 102,300 -37.7%77%Cape Coral, Fla. $ 118,700 -36.8%52%Houma, La. $ 116,200 -34.6%-1%Port St. Lucie, Fla. $ 115,600 -33.3%72%Warren, Mich. $ 117,500 -32.3%15%Vallejo, Calif. $ 196,900 -31.9%53%Modesto, Calif. $ 138,700 -31.8%67%Stockton, Calif. $ 145,100 -31.8%72%Source: PNC Financial Services and IHS Global Insight

Here is a list illustrating the most undervalued homes in 2006 and 2010.

Metro area Median home price Percent overvalued 2010 Percent overvalued 2006 Atlantic City, N.J. $ 232,100 30.2% 59% Wenatchee, Wash. $ 240,900 28.9% 13% Ocean City, N.J. $ 294,800 26.6% 47% Longview, Wash. $ 184,700 22.3% 24% Honolulu, Hawaii $ 605,300 21.9% 31% Asheville, N.C. $ 172,900 21.8% 24% Portland, Ore. $ 267,600 20.8% 35% Bellingham, Wash. $ 280,200 20.0% 43% Corvallis, Ore. $ 266,400 18.9% 14% Salem, Ore. $ 201,000 18.2% 25% Source: PNC Financial Services and IHS Global Insight Metro area ▼ Median home price Percent undervalued 2010 Percent undervalued 2006 Cape Coral, Fla. $ 118,700 -36.8% 52% Houma, La. $ 116,200 -34.6% -1% Las Vegas, Nev. $ 129,700 -41.4% 38% Merced, Calif. $ 102,300 -37.7% 77% Modesto, Calif. $ 138,700 -31.8% 67% Port St. Lucie, Fla. $ 115,600 -33.3% 72% Stockton, Calif. $ 145,100 -31.8% 72% Vallejo, Calif. $ 196,900 -31.9% 53% Vero Beach, Fla. $ 123,300 -39.8% 54% Warren, Mich. $ 117,500 -32.3% 15% Source: PNC Financial Services and IHS Global Insight

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