The U.S. housing market is 40% over-priced

 

According to Amherst CEO Sean Dobson's analysis, the U.S. housing market is over-valued by 40%.  The insight is drawn by comparing actual, real-time prices across markets with an estimated fundamental or fair value provided by its proprietary model.  Despite the overvaluation, Dobson believes declining interest rates and strong income growth could stabilize home prices.  Dobson's analysis predicted a 10% price decline over the next two-and-a-half years, significantly reducing the price-to-value gap.  The decline could be higher if rates do not decline as expected or in the event of a recession.  Dobson said the pandemic-forced work-from-home revolution has led to buyers demanding more space and amenities, such as gardens.