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TheStreet) -- Home prices are rebounding so much in some U.S. cities that property values have actually risen beyond what local economic fundamentals justify, market watcher
"These are [generally] markets that have seen big price increases in the past year," Trulia Senior Economist Jed Kolko says. "They've had some of the strongest price rebounds in the country."
Trulia recently analyzed two key housing-market measures -- price-to-income ratio and price-to-rent ratio -- to see how current home values in America's 100 largest cities compare with historic norms.
The site found that overall U.S. home prices are 7% below where the two indicators suggest property values should be, as much as 9.4% too high in nine cities.
Kolko attributes the individual markets' excesses primarily to low inventories and strong demand that have pushed property values beyond what local incomes and rents can explain.
But he adds that U.S. home prices peaked at 39% above fundamental levels during last decade's housing boom, "so we have a long way to go before we're back in bubble territory."
Here's a look at five cities that
Trulia found have America's most overvalued homes.
The site estimated property values by looking at asking prices for residences recently listed for sale on Trulia.com, coupled with historic readings of the S&P/Case-Shiller Home Price Indices and Federal Housing Finance Agency data. Trulia then calculated price-to-income and price-to-rent ratios using U.S. government economic statistics for each metro area.