National City
Global Insight/National City Housing Valuation Analysis of Top 299 Metro Areas Sees Increase in At-Risk Markets WALTHAM, Mass., and CLEVELAND, Oct. 13 /PRNewswire-FirstCall/ -- Thesecond-quarter update of the Global Insight/National City Housing ValuationAnalysis released today shows the single-family housing market became moreovervalued from the first quarter. Fifty-six of the 299 metropolitan areasstudied, accounting for 32 percent of the total single-family housing market,were identified as being at risk of future price declines. This represents aslight increase from 53 metropolitan areas (31 percent of the single-familymarket) during the first quarter. (Logo: http://www.newscom.com/cgi-bin/prnh/20030428/NATIONALCITYLOGO ) "Evidence of bubblettes clearly continues to build," said Richard DeKaser,chief economist at National City Corporation (NYSE: NCC), "though frothyconditions still account for a minority of the overall housing market." The net addition of three metropolitan areas to the list of extremelyovervalued markets includes five new listings and two areas that have beendropped. New to the list are Fort Walton Beach, Fla.; Portland and Eugene,Ore.; Edison, N.J. and Bethesda, Md. Except for Fort Walton Beach, whereprices advanced at a 6.9 percent annual pace during the quarter, each areaamong the five new listings posted increases between 21 and 29 percent. Thetwo metro areas that fell off the list of extremely overvalued markets areBoston and Essex, each located in eastern Massachusetts. While prices therecontinued to rise at a healthy clip, improving fundamentals, such as incomeand population gains, helped reduce the imbalance. "We're not surprised by the emergence of extreme overvaluation in what areclearly hot spots for the housing market," stated Philip Hopkins, managingdirector of U.S. Regional Services at Global Insight. "And the Boston areaadjustment illustrates the possibility for orderly corrections, rather thaninevitable crashes. Outside the hottest housing markets, some signs of aslowdown in the rate of price growth were evident. The average level ofovervaluation declined from 22.7 percent to 19.9 percent, with 171 of the299 metropolitan areas analyzed showing a decrease in the extent ofovervaluation between the first and second quarters." The Global Insight/National City Housing Valuation Analysis examines thetop 299 U.S. real estate markets to determine what home prices should be,controlling for differences in population density, relative income levels,interest rates, and historically observed market premiums or discounts.Markets with valuation premiums above 30 percent were deemed at risk for pricecorrections based on the typical degree of overvaluation that preceded the63 known local market price declines observed since 1985. The Global Insight/National City Housing Valuation Analysis is a jointventure that combines a statistical model originally developed at NationalCity Corporation with data largely developed at Global Insight. Moreinformation is available at http://www.globalinsight.com/housingindex orhttp://www.nationalcity.com/economics. About National City Corporation National City Corporation (NYSE: NCC), headquartered in Cleveland, Ohio,is one of the nation's largest financial holding companies. The companyoperates through an extensive banking network primarily in Ohio, Illinois,Indiana, Kentucky, Michigan, Missouri and Pennsylvania, and also servescustomers in selected markets nationally. Its core businesses includecommercial and retail banking, mortgage financing and servicing, consumerfinance and asset management. For more information about National City, visitthe company's Web site at http://www.NationalCity.com. About Global Insight Global Insight, Inc. (http://www.globalinsight.com/) is a privately heldcompany formed to bring together the two most respected economic analysis,forecasting and financial information companies in the world, DRI and WEFA.Global Insight provides the most comprehensive economic coverage of countries,regions and industries available, using a unique combination of expertise,models, data and software within a common analytical framework to supportplanning and decision-making. Global Insight collects and delivers economicand financial information to clients and also provides a broad range ofconsulting capabilities. With its April 2003 acquisition of World MarketsResearch Centre, Global Insight also provides the world's first same-dayanalysis and risk assessment service covering 196 countries and 4 industries,providing insightful analysis of market conditions and key events around theworld. The company has over 3,800 client organizations in industry, financeand government with revenues in excess of $80 million, over 600 employees and23 offices in 12 countries covering North and South America, Europe, Africa,the Middle East and Asia.
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