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O.C. homes 9.7% overvalued, but that’s cheap compared to Texas

O.C. homes 9.7% overvalued, but that’s cheap compared to Texas

Home construction in Roanoke, Texas, where Highland Homes and Darling Homes in 2014 built upscale homes in the development known as Fairway Ranch. IAN MCVEA, FORT WORTH STAR-TELEGRAM

Numerous measures will tell you that Orange County housing is very expensive.

But a valuation metric from Fitch Ratings – best known for their credit ratings on bonds – says Orange County homes are a better value than homes in … Texas!

Value, in this study’s sense, is the ability for the current home price to stick.

Fitch’s Sustainable Home Price model measures price changes with broader economic progress in a region. By this math, Orange County homes were scored as 9.7 percent overvalued in the second quarter.

That may seem steep compared to the overall national overvaluation of 1.4 percent, but it’s less than California’s 11 percent overvaluation. The Golden State tied for fourth highest with Idaho … and Texas. (By the way, Nevada and Hawaii fared worst, at 15 percent overvalued. Arizona was next at 13 percent.)

Local homes are still pricier than Texas, but Fitch suggests there is more security in Orange County home values. Yes, Texas – California’s key economic competitor that’s often hailed for its low cost of living – scores poorly in this measurement.

Why? Texas job growth has stalled as oil prices have dropped, leaving doubts about the economic muscle underpinning the Lone Star state’s real estate markets.

Several Texas cities could be found atop Fitch’s list of most-overvalued markets for the second quarter: Austin was the nation’s most overvalued with its homes seen as 20.6 percent too pricey; second was San Antonio, at 19.8 percent; and Houston was seventh at 14.7 percent.

Fitch says in the report it “views the overall economy as relatively healthy and expects continued, modest price growth for the foreseeable future.”

Contact the writer: jlansner@ocregister.com

The Orange County Register – News Headlines : Real Estate News