Cities Most At Risk Of Overheating

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Is another bubble about to burst, or is the current rate of home value appreciation less nefarious?

July 19, 2016

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It seems as though a vast majority of people have finally put the housing bust behind them and are moving on to what will hopefully be better and brighter days. And yet, just as that begins to happen, the question arises; are some housing markets overheating, signaling another bursting bubble is on its way?

The short answer, is no. Sure, there are cities where small, rinky-dink houses are being sold for over a million dollars, but before the housing bust, prices were skyrocketing thanks to ultra-easy credit, out of control house flipping, and overbuilding. Today’s mountain top prices are due mainly to the housing shortage; its a supply and demand problem, realtor.com reports.

So, while these home prices that only seem to be getting higher and higher are still a problem, the good news is that none of the same factors that were responsible for the bubble bursting before are present in these high-priced cities.

That doesn’t mean, however, there aren’t markets that are showing signs of overheating. Based on factors such as price appreciation, home flipping, mortgages, home prices compared with wages, home prices compared with rent prices, and construction, realtor.com created a list of the top 10 that are in danger.

The top two markets on the list will come as no surprise, as San Jose, Calif., took the number one spot, edging out San Francisco, Calif. The cities in the three, four, and five spots may be a little more surprising to some, however. Austin, Texas came in third, while Salt Lake City, Utah, came fourth. Dallas, Texas took the fifth spot.

For the complete list, follow the link below.

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