Study shows homes across Washington state are overpriced

12:59 PM PDT on Tuesday, June 13, 2006

By TIM ROBINSON / KING 5 News

Just about anywhere you look in western Washington, you'll find the same thing: plenty of homes for sale.

And whether you start down south in Olympia or way up north in Bellingham, you'll find those homes all have something in common: they're overvalued.

Bellingham happens to be the worst, according to a study conducted by Global Insight, a financial information provider.

In the first quarter of this year, the overvalued home picture in Washington, going from bad to worse, looks like this:

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Housing Price Index

- Bremerton they're 32.3 percent over value.

- Seattle comes in at 34.1 percent over value and Olympia comes in at 38.9.

- Mount Vernon jumps to 45.1 percent and the most overvalued home prices are found in Bellingham, at 51.5

- Bellingham's median home price is $277,000, while Seattle's is just about $344,000.

- Spokane is at 23.2 percent over value, with the median home price of $171,700.

- Wenatchee comes in at 18.4 percent over value, median home price of $196,800.

- Tacoma is 31.9 percent over value, with a median home price of $249,000.

The Global Insight/National City Housing Valuation Analysis examines the top 317 U.S. real estate markets, or 84 percent of the housing market, to determine what home prices should be, controlling for differences in population density, relative income levels, interest rates, and historically observed market premiums or discounts.

Markets with valuation premiums above 34 percent were judged to be severely overpriced and at risk for price corrections.