| The problem here is a little more complex than one might think at first. Usually when something is overvalued it means that the value it has been given is higher than what people are willing to pay, resulting in a product which has been assigned a value nobody is willing to pay. This is not always that clear cut, as some things have different values to different people. What is overvalued and probably overpriced for one person might be well within reason for someone else. The housing market is very dependent on the location you live in so wihtout further information it's hard to say if a house is "overvalued". The price is normally closely related to the property price, so while housing might not be overvalued, property prices could very well be. Then there are different considerations regarding the longevity of your assets (aka your house). Most things you buy are rather short lived, this is not the case for property, which can be inherited over multiple generations. You also have to consider that the amount of land is limited (within cities) and owners/sellers are not necessarily companies trying to make a profit, so "normal" supply/demand doesn't necessarily apply in these situations and producing more (land/property) is just not doable. This also means that renting prices usually increase similarly to housing prices. There are lots of other variables here to consider but even regarding only a few of them its already really hard to say what a house or property is "worth", so what you should much rather be asking is "what are people willing to pay/how much can they pay". If that is your question you could look at default rates and newly approved credits to determine whether people are able to pay for their house. |