“High demand and limited supply have pushed home prices above where they were in early 2006,” said Frank Nothaft, chief economist at CoreLogic. “New construction still lags historically normal levels, keeping upward pressure on prices.”
The price gains are greatest in the nation’s largest markets. Half of the nation’s 50 largest markets are now considered overvalued, meaning home prices are at least 10 percent higher than the long-term, sustainable level.
Las Vegas, San Francisco, Denver and Los Angeles are all overvalued, as are Miami, Houston and Washington, D.C., according to CoreLogic.
Prices are seeing the biggest gains at the lower end of the market, where supply is leanest. Sales of homes priced under $100,000 fell more than 20 percent in March, according to the National Association of Realtors, not because there wasn’t demand, but because there was not enough supply.