Declining Home Prices Take Valuations to Pre-Bubble Levels

Cleveland–Lower U.S home prices have brought valuations–the difference between a home’s price and what it should cost–to pre-housing boom levels, according to a survey released Monday by research firm Global Insight and Cleveland-based banking company National City Corp.In the first three months of the year, home prices dropped in 262 of the 330 metropolitan areas studied–which means just eight markets are now thought to be overvalued, CNNMoney.com said. Last quarter, 14 markets were considered overvalued. At the housing market’s 2006 high point, 53 metro housing markets were considered to be valued above their homes’ actual worth.The readjustment was most pronounced in regions where home prices showed the biggest increases during the rapid housing market growth that started in 2004.The survey analyzed data on interest rates, household income, population density, historical price trends and current home prices.