Yet another 1Q 2006 national housing market report. This time the report is from National City care of Global Insights . Unlike a lot of the PR corporate housing report vehicle studies that are out there, this one is pretty good. Global Insights has taken great care to explain their methodology [pdf]  and the data that was used.
They take 2000 census data and grow the stats using the OFHEO study factoring out the refi data that pollutes it. Its a bit of a reach but overall it seems to be a reasonable methodology.
However, its still only a 1st quarter housing report but since it addresses affordability, its got a little more shelf life than some of the other housing studies that have been done.
Here is the summary (download the report as a pdf ):
* Overvaluation became more pervasive during the first quarter of 2006.
* Seventy-one metro areas, accounting for 39 percent of all single family housing value, were deemed to be extremely over-valued at that time. That represents an increase from 64 markets, and 36 percent of all single family market value, during the fourth quarter.
* As recently as the first quarter of 2004, overvaluation was insignificant. At that time only 3 metro areas, accounting for just 1 percent of all single family house value, were deemed to be extremely overvalued.
* The coastal states of California and Florida continue to show the highest concentration of overvalued markets, accounting for 17 of the top 20.
* Quarter-to-Quarter price appreciation is slowing in most metro areas, and is nearly flat in San Diego and Boston.
* Property price appreciation remains strongest among the most over-valued metro areas, and visa-versa. Between the fourth quarter of 2005 and the first quarter of 2006, the correlation between valuation and appreciation was +0.36, suggesting that house prices are diverging, not converging, with respect to normal valuations.
The report covers 84% of all 1-family US houses and is pretty gloom and doom because 39% of the markets are overvalued. The economic impact, if these tea leaves are accurate, could be significant.
Here’s some of the coverage.
Housing bubble correction could be severe [USNWR] 
‘Overpriced’ housing gets more overpriced [CNN/Money] 
Study: More US housing markets are overvalued [BG] 
More housing markets overvalued, study shows [MH]