FBR: # of MSA Price 'Bubbles' Rises

Some 75 metropolitan statistical areas are now facing home price "bubbles," up slightly from a previous reading, according to a new research report issued by Friedman Billings Ramsey, Arlington, Va.Using fourth-quarter data, FBR also says there are 28 "incipient" MSA bubbles in the United States, compared with 31 identified in the previous quarter. Even though FBR economist Michael D. Youngblood says he expects home price gains to slow, he is still quite bullish on California. Home values in California should rise on a "median year-over-year" basis by 26.3%, Mr. Youngblood writes in the report. FBR says that for the bubbles to actually pop in the 75 identified MSAs, values need to fall significantly. In Santa Barbara, Calif., for instance, home prices need to fall by almost 65%, according to FBR. The company identifies bubbles by comparing home prices with an MSA's per capita personal income.