SoCal housing markets among most overvalued, but at least we’re not Austin

Southern California’s housing markets are among the most overvalued in the nation, according to a new report. But the closest thing in this country to a housing bubble is actually in Texas.

That’s according to figures out Wednesday from real estate website Trulia, which issued its quarterly “bubble report,” which measures home prices against incomes, rents and historic trends in 100 big cities. Of the five frothiest, three are in the Southland.

Prices in Los Angeles and Orange Counties were each 15% above what economic fundamentals support, according to Trulia chief economist Jed Kolko. In the Inland Empire, they’re 11% overvalued.

That’s actually a bit below the levels Trulia recorded three months ago, probably because home price gains have slowed while incomes have climbed. But it’s a contrast from the nation’s market as a whole, which remains 3% “undervalued,” according to Trulia.

And one big city now exceeds L.A. in its bubbly-ness: Austin, Texas, has seen prices surge to the point that they now sit 19% above what the local economy and past trends would support. The bubble and crash of the mid-2000s largely passed Austin and its Texas neighbors by, but this time, they’re leading the charge. Houston, too, is the eighth most overvalued market, Trulia said.

Of course, any exuberance this time around is nothing compared to the mid-2000s. By the same measures, L.A.’s housing market was inflated 66% above fundamentals back in 2006. And we all know what happened next.

Keep an eye on housing and real estate in Southern California. Follow me on Twitter at @bytimlogan