Home prices in Bend continue to drop, but we're still the second most overvalued real estate market in the country, according to the international economic analysis firm Global Insight.
In its report for the second quarter of 2008, Global Insight says that at a median of $285,000, homes in the Bend metro area are overvalued by 46.6%. Only the resort and casino town of Atlantic City, NJ, at 51.6%, is more overvalued.
Global Insight's analysts determine "fair value" for homes on the basis of historical patterns, interest rates, income levels, population densities and other factors.
In most areas of the country, according to the report, home prices have fallen back to fair or nearly fair values. "The markets that are now overvalued are mainly located in the Northwestern portion of the United States (Washington, Oregon, and Utah)," the report says. "These areas have seen prices begin to decline only during the last year, and two areas, Honolulu, HI and Wenatchee, WA, have yet to see any price declines. Areas that had been extremely overvalued in late 2005 began to see prices decline toward the end of 2006 and early in 2007. These areas are now the ones with some of the largest price declines and the largest changes in their valuation levels."
The median home price in Bend is down from $290,100 in the first quarter of this year and $314,800 in the second quarter of 2007, but it looks like we still have a bit of catching up to do.