18 Cities That Might Be In a Housing Bubble

Photo by Dimj / Shutterstock.com

The housing market in one U.S. financial center is overvalued and approaching bubble-risk territory, a recent analysis shows.

Prices in San Francisco have already surpassed their previous 2006 peak by 5 percent, according to 2016 UBS Global Real Estate Bubble Index report.

The report, released this week, analyzes residential property prices in 18 cities worldwide that are considered financial centers. UBS defines a bubble as “a substantial and sustained mispricing of an asset.”

San Francisco is categorized as overvalued this year, ranking No. 7 — well above the three other U.S. cities included in the report. The report explains:

In the wake of the technology boom and buoyant foreign demand, real house prices have increased in San Francisco by more than 50 percent since 2011, while the national price level has risen by just 15 percent…Even though income growth rates have been above the national rate, the imbalances in the city’s real estate market have increased.

Vancouver, near the U.S.-Canada border, ranks No. 1 on the index this year, meaning it’s facing the greatest risk of a housing bubble of the 18 cities analyzed.

Among other factors cited in the report, real house prices in Vancouver have increased by more than 25 percent since the end of 2014. The report attributes the rise to a weakened Canadian dollar that increased Asian demand for property in the city.

The index has five categories:

  • Bubble risk (score higher than 1.5)
  • Overvalued (0.5 to 1.5)
  • Fair-valued (-0.5 to 0.5)
  • Undervalued (-1.5 to -0.5)
  • Depressed (score below -1.5)

The ranking and scores of the 18 financial centers analyzed for the latest index report are:

  1. Vancouver: 2.14 (Bubble risk)
  2. London: 2.06 (Bubble risk)
  3. Stockholm: 1.92 (Bubble risk)
  4. Sydney: 1.70 (Bubble risk)
  5. Munich: 1.59 (Bubble risk)
  6. Hong Kong: 1.52 (Bubble risk)
  7. San Francisco: 1.27 (Overvalued)
  8. Amsterdam: 1.22 (Overvalued)
  9. Zurich: 1.03 (Overvalued)
  10. Paris: 0.82 (Overvalued)
  11. Geneva: 0.75 (Overvalued)
  12. Tokyo: 0.68 (Overvalued)
  13. Frankfurt, Germany: 0.66 (Overvalued)
  14. Singapore: 0.45 (Fair-valued)
  15. Boston: 0.29 (Fair-valued)
  16. New York: 0.13 (Fair-valued)
  17. Milan: -0.09 (Fair-valued)
  18. Chicago: -0.70 (Undervalued)

What do you make of this analysis? Do you worry about another housing bubble bursting the U.S.? Share your thoughts below or on our Facebook page.

How to find cheaper car insurance in minutes

Getting a better deal on car insurance doesn't have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $368 per year, according to the site, so if you're ready to secure your new rate, get started now.

Read Next
9 Houseplants That Remove Toxins From Your Indoor Air
9 Houseplants That Remove Toxins From Your Indoor Air

These plants may also do everything from reduce the amount of dust in your home to improve your productivity.

7 Tips for Building an Emergency Stockpile
7 Tips for Building an Emergency Stockpile

A pandemic or natural disaster could leave you reliant on your existing food supply. Is your pantry prepared?

26 Things Everyone Should Keep in Their Car
26 Things Everyone Should Keep in Their Car

These tools and conveniences help protect drivers from hassles and calamities on the road.

8 Common and Costly Homebuying Myths
8 Common and Costly Homebuying Myths

Think you’re ready to buy a house? Don’t fall victim to these rookie mistakes.

5 Ways to Put an End to Junk Mail
5 Ways to Put an End to Junk Mail

Here’s how to keep unwanted mail from clogging your mailbox and trash can.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
Will I Get My Ex-Husband’s Social Security When He Dies?
Will I Get My Ex-Husband’s Social Security When He Dies?

Two factors determine how much money is coming to you.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

22 Things You Should Always Buy at a Dollar Store
22 Things You Should Always Buy at a Dollar Store

The dollar store has great bargains on these purchases.

5 Household Disinfectants That Can Destroy the Coronavirus
5 Household Disinfectants That Can Destroy the Coronavirus

You likely already have some of these products at home.

6 Reasons I Will Never Trust Suze Orman
6 Reasons I Will Never Trust Suze Orman

Beware: The self-proclaimed personal finance expert has a track record that suggests more sizzle than steak.

20 Things That Are Actually Worth Stockpiling
20 Things That Are Actually Worth Stockpiling

You probably don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

16 Amazon Purchases That We Are Loving Right Now
16 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

America’s Most Reliable Appliance Brand Is a Surprise
America’s Most Reliable Appliance Brand Is a Surprise

Have you heard of this appliance manufacturer?

This Type of Social Security Benefit Is Often Overlooked
This Type of Social Security Benefit Is Often Overlooked

The Social Security Administration is not helping certain people get money to which they are entitled, a report says.

Getting These 2 Shots Could Reduce Your Risk of Dementia
Getting These 2 Shots Could Reduce Your Risk of Dementia

These vaccines may lower the risk of Alzheimer’s disease by up to 40%.

9 Everyday Problems You Can Solve With Vaseline
9 Everyday Problems You Can Solve With Vaseline

Forget expensive specialty products. Good ol’ petroleum jelly can address many common annoyances.

10 Deep Discounts Available on Amazon This Friday
10 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

19 Purchases That Buyers Almost Always Regret
19 Purchases That Buyers Almost Always Regret

Think twice before buying these things.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

8 of the Worst Things to Buy at a Dollar Store
8 of the Worst Things to Buy at a Dollar Store

Not everything sold at dollar stores is a great bargain or a safe purchase. Here’s our list of products to avoid.

41 Things You Should Never Buy
41 Things You Should Never Buy

Some purchases are just plain dumb. Give yourself — and your budget — a break. Don’t spend money on this stuff.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

13 Brilliant Bulk-Buy Items on Amazon
13 Brilliant Bulk-Buy Items on Amazon

Every household should have these products on hand. Buying them in bulk on Amazon saves you cash.

8 Award-Winning Products That Impressed 40,000 Shoppers
8 Award-Winning Products That Impressed 40,000 Shoppers

The Product of the Year awards help shoppers find the best pet products, personal care items and everything in between.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.