Tucson
No. 7 on Forbes list of overvalued housing cities Tucson is keeping
big-name company with New York City, Los Angeles and San Francisco in an unfortunate
Top-10 list: It puts us among the country's most overpriced places. Forbes.com has ranked Tucson the seventh most overpriced
place in the United States, just behind New York City at No. 6, and just ahead
of Los Angeles at No. 10. Essex County, Mass., ranked first. The article
calls Tucson a "surprise newcomer" to the list and cites the recent
run-up in real-estate prices. "Though our data shows that job growth
is healthy, salaries don't seem to be keeping up with the high living costs. And
while housing prices may still be low compared with the hottest areas of the country,
the housing boom pushed them up considerably," it says. The story also
says Tucson, while showing promise through the corporate presences of America
Online and Intuit, ranks poorly in pay and in the bottom third in housing affordability,
citing National Association of Realtors figures. Those figures say the median
home price increased by 25 percent to $248,600 from the first quarter of 2005
to the first quarter of 2006, according to the Forbes article. The article
ranked 112 metro areas based on cost of living, job growth, housing affordability
and salaries. Where housing is concerned, the list doesn't appear to consider
that manufactured housing is a low-cost alternative to single-family homes and
that Tucson routinely has some of the lowest rental rates in the country, said
Marshall Worden, of the University of Arizona's Office of Economic Development. "When
you think about affordability, when you think about things being overpriced, you
have to think about the entire housing stock," Worden said. "I think
the article is misleading. It misrepresents the complexity of housing markets." A
message left with Forbes.com and the article's author, Lacey Rose, was not returned
Wednesday. Tucson wasn't anywhere near the top 10 last month when data purveyor
Global Insight and National City Corp. released its most recent ranking of the
most overvalued housing markets. The Old Pueblo didn't even make the top 50 list
of metropolitan areas, although that report did conclude that Tucson's housing
market was "extremely overvalued" by about 36 percent and at risk for
a price correction. The report said that 39 percent of all single-family
housing valuation in America is also extremely overvalued and at risk for a price
correction. The study examined 317 U.S. real-estate markets and considered differences
in population density, relative income, interest rates, and historically observed
market premiums or discounts. While the Forbes.com article calls Tucson
overpriced, the American Chamber of Commerce Researchers Association cost-of-living
index consistently ranks Tucson near the national average, said Paula Stuht, vice
president of economic development for the Tucson Metropolitan Chamber of Commerce.
Those rankings are based on surveys that look at groceries, utilities, housing
and rental prices and other costs. Stuht said to take the Forbes study with
a grain of salt. "I think a very, very large grain of salt makes sense
because they have a very specific mission, they're proving one small statistical
factor. They're proving our housing prices shot up faster than wages went up,
and that is true. Wages don't tend to jump as fast," she said. The
list highlights good issues but isn't necessarily meaningful, said Pat Patton,
chief economist with economic development agency Tucson Regional Economic Opportunities
Inc. He said it was nice that Tucson was being lumped in with "elite"
cities like Los Angeles and New York, but called their method of calculation "kind
of arbitrary." "In an absolute sense, you just have to be kind
of careful how you use some of these," Patton said. But rankings come
and go. In May, Forbes Magazine ranked Tucson 22nd out of the 150 best places
to jump-start a business or career. Our ranking may have been even higher but
for Tucson's last-place ranking at 150th place in the crime-rate category. On
StarNet: What are homes selling for in your neighborhood? Check recent sales www.azstarnet.
com/homes Coming Sunday --Last year's condominium craze has settled
down as sales have slowed, prompting some developers to postpone their condo plans. Forbes'
top 10 overvalued cities --The 10 most overpriced places in the United States
and their median home prices, according to a Forbes.com ranking that considered
cost of living, job growth, housing affordability and salaries. 1. Essex
County, Mass.: $373,750 2. San Francisco: $720,400 3. San Jose, Calif.:
$746,800 4. Honolulu: $625,000 5. Cambridge, Mass.: $390,400 6.
New York: $528,700 7. Tucson: $248,600 8. Oakland, Calif.: $720,400 9.
Boston: $390,400 10. Los Angeles: $563,900 Tucson No. 67 in alternate
rating --Last month, National City Corp. and Global Insight released their
ratings of the most overvalued housing markets, and the results were much different
from Forbes' new rankings. Using data from the first quarter of this year, they
ranked a larger group of U.S. housing markets and included an estimate of the
percentage by which each housing market is overvalued. Home prices are calculated
using median prices from the 2000 Housing Census and based on price indices. Percentage
of City Home price overvaluation 1. Naples, Fla. $383,000 103 2. Salinas,
Calif. $608,600 79 3. Port St. Lucie-Fort Pierce, Fla. $240,800 77 4.
Merced, Calif. $291,300 77 5. Bend, Ore. $276,100 76 6. Stockton,
Calif. $344,600 75 7. Punta Gorda, Fla. $210,900 74 8. Santa Barbara,
Calif. $629,600 73 9. Madera, Calif. $301,600 73 10. Riverside-San
Bernardino, Calif. $332,300 69 67. Tucson $193,200 36 | 
