OC Homes Are 2nd-Most Overpriced In The Country, Ranking Says

Orange County was recently ranked the second-most overpriced U.S. market for homeowners.

The Burns Under/Overpriced Market Index ranked the county as having housing that was priced 35 percent too high in May, second only to Indianapolis at 42 percent, according to John Burns Research & Consulting.

The index analyzes the spread between a market’s current housing-cost-to-income ratio and its longer-term norm ratio, according to Director of Research Rick Palacios Jr. The ratio is determined by dividing a market’s median monthly housing costs by 125 percent of the median income, Palacios explained in a social media comment.

Orange County’s average home value in May was just under $1.2 million and up 1.2 percent over the past year, according to Zillow.

The only other California markets ranked as very overpriced were San Diego and Riverside-San Bernardino at 25 percent. Los Angeles, San Jose, San Francisco, Sacramento and the East Bay were all ranked as overpriced, and were determined to be priced between 19 percent and 11 percent too high.

The only market in the ranking considered to be fairly priced was Austin at 6 percent.