Bend has earned a high spot on a national list again, although this time it's an honor that we probably would just as soon pass up.
According to a National City Bank economic report released May 30, the median price of a single-family house in Bend in the first quarter of 2008 - $290,500 - was 49.5% above where it should be, based on the area's income levels, population density and historical patterns. Only Atlantic City, NJ was more highly overvalued, at 55.6%.
National City has posted a cool interactive map that shows each of the 330 metro areas it analyzed, marked as undervalued (brown), fairly valued (green), moderately overvalued (yellow) and overvalued (red). Deschutes County shows up as an island of red in the middle of Oregon. Portland and Salem are also red, while the Corvallis, Eugene and Medford areas are yellow.
The Pacific Northwest generally is the reddest corner of the map, and - rather surprisingly - most of California is now green. Only the LA-Riverside and Madera areas are yellow, and nothing is red.
National City cautions against reading too much into its findings: "Users sometimes misinterpret the valuation metrics by assuming that a particular degree of overvaluation implies that house prices are destined to decline by that amount." In other words, saying that Bend homes are 49.5% above what the study considers "fair value" doesn't necessarily mean the median price will drop down to less than $147,000.
Still, if National City's analysts know what they're talking about it looks like the Bend market still has quite a bit of correcting to do before we see a turnaround.