Forbes compiles their list of ten most (and least) overpriced real estate markets. And while overpriced isn’t necessarily correlated with “expected to fall,” San Francisco is singled out as a market that fits their “bubble territory” profile:
“San Francisco, ranked fourth, fits that bill. Despite home prices growing at a 2% clip over last year, according to the NAR, the city by the bay ranks third to last in expected income growth, reports Moody’s. Not good news in a market where only 7.5% of housing is affordable for the median-income earner. Combine that with a housing P/E ratio over 50, and it isn’t difficult to imagine some softening on the horizon.”
Other local markets that made the top (overpriced) ten: Sacramento (3rd) and San Jose (10th). And while it wasn’t Forbes, it was just six months ago that Business 2.0 identified San Francisco as one of five “bubble-proof” markets.