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According to a recent report, properties in Las Vegas and Detroit are the nation's most undervalued residential properties.
In markets such as New York City, Los Angeles and San Francisco, homes for sale are at a premium. However, in Sin City, property values have dropped increasingly each month. Helping the cause, Nevada has led the nation in foreclosure rate for 55 straight months.
The report used a ratio that compared the median price of a home in metro areas with the median level of household income in the region. Between 1985 and 2000, home prices were close to three times the level of household income. However, since the recession and housing bubble, the ratio has grown, reaching a peak of 5.1 times the median household income in 2005.
The ratio has since fallen to 3.3 percent nationwide. Yet, in 42 metro areas, the ratio is even lower than the historic levels. In California, for instance, price-to-income ratios are as high as 19 percent below historic norms. In Las Vegas, though, the ratio is much tighter, which placed atop the list of most undervalued.
The report also believes some areas, such as Detroit, may not return to historic levels "because of fundamental changes in local housing demand."
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