An Unreasonable Case That Housing Is Undervalued

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By Douglas A. McIntyre Updated Published

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IHS Global Insight has released a report that say that housing price in the US rose by .2% in the third quarter compared to the second. The research firm looks at 300 metropolitan markets. Prices rose in 169 of these markets.

The odd part of the study was that IHS says that housing in now undervalued, at least based on its Byzantine methodology. The firm writes “For the nation as a whole, the housing market is now slightly undervalued – 8.6 percent when weighted by market value; 10.1 percent when weighted by housing units.”

Recent information on the rise of unsold foreclosed homes, an increase in mortgage delinquencies, the relative failure of the government’s loan modification program, and the large number of “interest rate only” mortgages that reset in 2010 make it unlikely that the IHS data is any real indication of the direction of the housing market.

Housing prices will probably not be going up by the third quarter of next year.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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