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U.S. real estate prices at high risk of correction

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A study of the top 299 U.S. real estate markets released this week by the economics department of National City Corp. concludes that 53 metro areas representing 31 percent of the total U.S. housing market are "extremely overvalued" and confront a high risk of future price correction. Richard DeKaser, chief economist of National City Corp., and research assistant John G. Charamonde conducted the study, which examines historical comparisons for the last 20 years and reflects 80 percent of the U.S. single-family housing market, National City Corp. announced today. Markets with valuation premiums above 30 percent were deemed at risk for price corrections based on the typical degree of overvaluation that preceded the 63 known local market price declines observed since 1985. The study, "House Prices in America: Valuation Methodology and Findings," finds Santa Barbara, Calif., to be the country's most overheated market at 69 percent above the norm, while College Station, Texas, is ranked ...