“Nationwide, we’re not in a bubble,” says Glenn Kelman, CEO of online real estate company Redfin, however Washington D.C., Los Angeles, San Francisco and San Diego may be headed that direction, according to Redfin’s data. Redfin is not in St Louis so our city was not on their list but in the coming weeks I plan to do an analysis of the St Louis market in the same manner they did of other markets and will publish what I find at that time. In the meantime, here’s the info from Redfin.
Comparing Today’s Market To The Bubble:
Redfin did a comparison of market factors that existed during the boom of 05/06 and compared those factors to today’s market:
| The Bubble of 2005/2006 | Spring 2013 |
| High price-to-income (PI) ratios | Low to average PI ratios |
| Lots of new listings | Record low new listings |
| Record high sales volume | Average sales volume |
| Extremely easy credit | Relatively tight credit |
Source: Redfin
What Markets Are Most Likely To Have Another Housing Bubble?
Redfin looked at rising prices versus income and other factors to determine which markets “feel bubbly”. Below is their list from “most bubbly” to “least bubbly”.
| Market | Froth Factor (Market Ranking) | Price-to- Income Ratio, January 2013vs. January 2000 | Ratio of Sale Price to List Price,March 2013 | Flips: % of Homes Sold in March 2013 that Had Already Been Sold Once In Past 18 Months | % of Redfin’s March Deals Involving a Bidding War | % of March Listings Under Contract Within Two Weeks of Debut |
| Washington DC | 1 | 26% | 98% | 11% | 71% | 43% |
| Los Angeles | 2 | 26% | 100% | 10% | 91% | 52% |
| San Diego | 3 | 13% | 99% | 11% | 91% | 50% |
| San Francisco | 4 | 12% | 104% | 10% | 93% | 60% |
| New York | 5 | 9% | 94% | 6% | 68% | 9% |
| Portland | 6 | 8% | 99% | 8% | 60% | 41% |
| Boston | 7 | 6% | 97% | 11% | 74% | 3% |
| Seattle | 8 | 4% | 100% | 12% | 74% | 48% |
| Denver | 9 | 0% | 100% | 12% | 46% | 52% |
| Phoenix | 10 | -4% | 99% | 10% | 36% | 37% |
| Charlotte | 11 | -8% | 97% | 3% | 50% | – |
| Dallas | 12 | -10% | 98% | 7% | 46% | 28% |
| Las Vegas | 13 | -14% | 101% | 10% | – | 14% |
| Chicago | 14 | -17% | 97% | 7% | 51% | 12% |
| Atlanta | 15 | -20% | 99% | 18% | 50% | 24% |
| National | – | 5% | 99% | 10% | 76% | 35% |
Source: Redfin
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