BUBBLE TROUBLE

The frothiest housing markets — predominantly clustered in Florida and California — have posted 20-percent compounded annual growth rates in the past five years, meaning housing prices in the hottest MSAs have more than doubled in some places. Other states with high appreciation include Hawaii, Nevada and Rhode Island.

TEN MOST "OVERHEATED" MSAS
MSA Median Home Price Compounded
Annual Growth Rate (00-05)
Mortgage
Debt Service %
Median Household Income
Riverside-San Bernandino, Calif. 22.0% 37.0% $46,897.00
San Diego-Carlsbad-San Marcos, Calif. 17.5 42.0 $51,700.00
Los Angeles-Long Beach-Santa Ana, Calif. 19.6 35.0 $50,399.00
Honolulu 14.9 44.0 $55,624.00
Sacramento-Roseville, Calif. 21.0 29.0 $51,409.00
Miami-Ft. Lauderdale-Miami Beach 21.1 28.0 $43,942.00
Sarasota-Bradenton-Venice, Fla. 20.1 24.0 $44,444.00
Washington, D.C./Arlington/Alexandria, Va. 18.9 24.0 $70,368.00
Cape Coral-Ft. Myers, Fla. 22.5 20.0 $44,476.00
Las Vegas-Paradise, Nev. 17.3 25.0 $51,038.00
Top 10 MSAs 19.5 30.8 $50,719.00
Top 10 Calif. MSAs 20.0 35.8 $50,904.00
Top 10 Fla. MSAs 21.3 24.0 $44,444.00
U.S. 8.3 16.0 $44,684.00
TEN MOST “OVERHEATED” STATES
State Median Home Price Compounded
Annual Growth Rate (00-05)
Mortgage
Debt Service %
Median Household Income
California 17.8% 37.5% $51,185.00
Hawaii 14.9 44.0 $53,554.00
Washington, D.C. 18.9 24.0 $46,574.00
Nevada 17.3 24.0 $44,646.00
Rhode Island 15.1 23.0 $48,722.00
Arizona 13.4 21.5 $41,995.00
Florida 15.0 18.4 $41,236.00
Maryland 14.8 18.0 $57,424.00
Massachusetts 11.8 20.4 $55,658.00
Maine 12.6 19.0 $42,163.00
Top 10 States 15.2 25.0 $47,648.00
U.S. 8.3 16.0 $44,684.00

Sources: National Association of Realtors, U.S. Census Bureau, 2004 American Community Survey, Scan/US, Morgan Stanley Research