From CNN Money:
Overall, 37 markets were found to be severely overpriced, which meant that they were at least 15 percent more expensive than they should be, and only 6 were underpriced by 15 percent or more. Fifty-seven were deemd to be farily priced.
The level of over-valuation matters in three ways, according to Ingo Wenzer, president of Local Market Monitor. The higher it is, the greater the risk of it correcting; the greater the correction can be; and the longer it will take to return to present-day prices after they fall.
“Once markets are overpriced by 40 percent or so, the risk is pretty high and the adjustment can take five to 10 years,” said Winzer.
Atlantic City, NJ 41% Overvalued
New York, Northern NJ 43% Overvalued
(remember these are statistical areas, not actual towns)
Thanks to Judy for sending this link in.