Is Your City Already Facing the Next Housing Bubble?
Rapidly rising property values in a handful of U.S. markets have some economists saying those cities are experiencing a housing bubble, according to a quarterly report from real estate company Zillow and research firm Pulsenomics. Analysts are most concerned about a housing bubble in the San Francisco Bay Area, where home values have increased as much as 14.7% in the last year.
"A handful of markets -- especially the Bay Area -- are very hot right now, and it's possible home values may actually begin to fall somewhat in these places as more residents are priced out amidst rising affordability concerns, especially when interest rates rise," Svenja Gudell, Zillow chief economist, said in a news release about the report. Gudell said it's up for debate among economists whether those conditions constitute a bubble, and the current housing market doesn't resemble the last U.S. housing bubble, which preceded the Great Recession.
Homebuyers can see how much house you can afford by using a mortgage calculator. Being able to afford a home depends on a number of factors including where you live, your income, debts, and your credit score. (You can check your credit scores for free on Credit.com to see where you stand.)
The report is based on survey responses from 108 housing experts, 66 of whom commented on bubble conditions (or the risk for them) in 20 major U.S. housing markets. The consensus is that most of those markets aren't in bubbles and aren't at risk for developing them in the next six months, but a handful of cities show warning signs. Here are the markets where some experts already see housing bubbles.