No. 1 most-overvalued market: Orange County, Calif.
How much prices exceed fundamentals by: 9.4%
This popular residential area adjacent to Los Angeles has seen asking prices on homes shoot up 18.6% over the past year. That's far above the 3.2% gain recorded for rents.Kolko attributes the higher property values to strong investor demand, good job growth and a dearth of available residences due to underwater homes. But again, Trulia doesn't see a bubble forming. The site estimates Orange County home values got as high as 71% above market fundamentals in 2006.