Yet another 1Q 2006 national housing market report. This time the report is from [National City care of Global Insights](http://www.globalinsight.com/Highlight/HighlightDetail2350.htm). 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]](http://www.globalinsight.com/gcpath/1Q2006methodology.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](http://www.globalinsight.com/gcpath/1Q2006report.pdf)):

_Summary_
* 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]](http://www.usnews.com/usnews/biztech/articles/060613/13housing_bubble.htm)[‘Overpriced’ housing gets more overpriced [CNN/Money]](http://money.cnn.com/2006/06/12/real_estate/overvaluation_even_worse/index.htm)[Study: More US housing markets are overvalued [BG]](http://www.boston.com/business/globe/articles/2006/06/13/study_more_us_housing_markets_are_overvalued/)[More housing markets overvalued, study shows [MH]](http://www.miami.com/mld/miamiherald/business/14803145.htm)