Report shows Houston housing market has over-valued homes

By Gianna Caserta - Reporter
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HOUSTON - According to a new report, Houston is one of 19 metros in the United States with over-valued home prices, which means we could be headed toward another real estate bubble.

The report estimates home prices nationally are about 4 percent under-valued, while Houston home prices are 2 percent over-valued.

"Houston has seen some pretty high growth of prices, and obviously growth in number of sales as well," said Houston Association of Realtors Chair Chaille Ralph.

That has some people worried a real estate bubble might be forming, but Houston brokers don't agree.

"The amount of people moving to Houston will support the prices that people are paying," said Clayton Katz, MOVE Properties owner/broker.

Katz says it is an incredible time to sell because many sellers are getting offers over their asking price.

"I have been in bidding war situations where there are three offers on the first day and it ends up selling $36,000 over list price," said Katz.

Despite the rising rents and home prices, Houston is still more affordable than many other major cities in the country.

A Costar Group report analyzed the average rent for a one-bedroom apartment in major cities. Houston came in at $913, which is lower than other popular locations, including Dallas, Chicago and Boston.

But low rent prices doesn't mean the housing market will suffer.

"It is bringing more and more people inside the city to live and at some point they will want to purchase," said Katz.

February sales were up 8.3 percent in Houston from last year, making it the 33rd consecutive monthly increase.

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