The Economist had a good property special section last week, and it’s best summed up by this piece and also the table below showing which global housing markets are overvalued, undervalued, or fair value. The U.S. is categorized in three value measures and the Case Shiller National Index is the broadest data set. And if you prefer easy-breezy slideshow form, visit BusinessInsider.
The Economist is characteristically tempered, so a key point about property is mentioned but underemphasized: the incredible inefficiency of property … meaning that not all information about a given neighborhood or home is available to all market participants at the same time. The macro stats below give us a broad market view, but successful property investing is all about researching and selecting neighborhoods and properties that are undervalued. Professional investors make their livings identifying and exploiting market inefficiencies—or put simpler: finding undervalued securities to invest in. This is the core premise of value-oriented long-term investing, and it should also be the core premise of property investing.