Housing Market 'Crash' Concerns Raised for One City

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Homes in Detroit are overvalued, according to researchers.

Detroit's homes are overvalued, helped by people in the area moving to new properties and contributing to an increased demand, according to new research.Home prices in the city may crash before they return to their normal trend, the researchers from Florida Atlantic University and Florida International University said. Houses in the Detroit metro area were nearly 41 percent overvalued compared to their typical prices, leading all the markets they examined.

The researchers used data from the real estate platform Zillow to analyze housing prices. They examined 'the difference in actual average selling price in a city and the city's statistically modeled average selling price to calculate a premium or a discount.'The results showed that of the 100 cities under examination, 98 were selling properties at a premium, while Honolulu, Hawaii, and New Orleans, Louisiana, were going for a discount.

 

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