Bubble Metrics

National studies vary widely on market frothinessfrothy The concept of applying economic and demographic data to a given market and determining whether or not it is an overpriced real estate market fascinates me. These market predictions are even more interesting when three respected economic number crunchers arrive at very different conclusions about given markets as outlined by a recent Wall Street Journal article. PMI Mortgage Insurance picks: Boston; Nassau-Suffolk, NY; San Diego; San Jose and Santa Ana-Anaheim-Irvine, CA for its top five. National City's top five are: Santa Barbara; Salinas, CA; Naples, FL; Riverside-San Bernardino, CA and Merced, CA. Credit Suisse First Boston tabs Fresno; Las Vegas; Los Angeles; Riverside-Bernardino, CA and Phoenix as its top five. The only market to appear on both lists is Riverside-San Bernardino, CA. I think that the moral of the story is that picking heated real estate markets is an inexact science and differing methodologies can produce dramatically different results. Although it has not happened yet, I wonder if some of the real estate industry economists like Robert Schiller and David Lereah will reach the near rock star status that Morgan Stanley analyst Mary Meeker or Solomon Smith Barney analyst Jack Grubman reached at the height of the Internet craziness. Bubble-Metrics: Economists Handicap Housing Markets [Wall Street Journal]

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