Housing price gains are outpacing fundamentals, as the median new home sale price relative to real disposable income has recent reached all-time high levels (higher than than the admitted bubble of the mid 2000s), and there are several regions around the US that are seeing simply stunning levels of exuberance with regard price changes. That leaves us asking – just which cities are the most bubble-prone? In order to answer that, Bloomberg has quantified the US cities with the most rapid growth in unemployment (not exactly supportive of home price excesses) coupled with the fastest rising prices. The answer – Yuma, Arizona (followed closely by Elmira, NY) is the most housing-bubble-prone city in the US.
Bloomberg ranked U.S. metropolitan areas on their year-over-year increase in unemployment and median housing list prices.
The score was calculated by averaging the two percentage ranks of both criteria. Only metropolitan areas with an increase in both unemployment and median housing list prices between April 2012 and April 2013 were included. For metropolitan areas with more than one city, the average median housing list price of all cities within the area was used. Unemployment rates are seasonally adjusted.