Markets
These Global Cities Show the Highest Real Estate Bubble Risk
These Global Cities Show the Highest Real Estate Bubble Risk
Housing bubbles are a tricky phenomenon. As a market gathers steam and prices increase, it remains a matter of debate whether that market is overvalued and flooded with speculation, or it’s simply experiencing robust demand.
Of course, once a bubble bursts, it’s all obvious in hindsight.
One common red flag is when prices decouple from local incomes and rents. As well, imbalances in the real economy, such as excessive construction activity and lending can signal a bubble in the making.
The map above, based on data from the Real Estate Bubble Index by UBS, examines 25 global cities, scoring them based on their bubble risk.
Overinflated Markets
In the 2022 edition of the Real Estate Bubble Index, nine of the cities covered were classified as having extreme bubble risk (1.5 or higher score).
Rank | Risk Category | City | Bubble Index Score |
---|---|---|---|
#1 | 🔴 | 🇨🇦 Toronto | 2.24 |
#2 | 🔴 | 🇩🇪 Frankfurt | 2.21 |
#3 | 🔴 | 🇨🇠Zurich | 1.81 |
#4 | 🔴 | 🇩🇪 Munich | 1.80 |
#5 | 🔴 | ðŸ‡ðŸ‡° Hong Kong | 1.71 |
#6 | 🔴 | 🇨🇦 Vancouver | 1.70 |
#7 | 🔴 | 🇳🇱 Amsterdam | 1.62 |
#8 | 🔴 | 🇮🇱 Tel Aviv | 1.59 |
#9 | 🔴 | 🇯🇵 Tokyo | 1.56 |
#10 | 🟠| 🇺🇸 Miami | 1.39 |
#11 | 🟠| 🇺🇸 Los Angeles | 1.31 |
#12 | 🟠| 🇸🇪 Stockholm | 1.22 |
#13 | 🟠| 🇫🇷 Paris | 1.21 |
#14 | 🟠| 🇦🇺 Sydney | 1.19 |
#15 | 🟠| 🇨🇠Geneva | 1.14 |
#16 | 🟠| 🇬🇧 London | 1.08 |
#17 | 🟠| 🇺🇸 San Francisco | 0.78 |
#18 | 🟠| 🇺🇸 Boston | 0.75 |
#19 | 🟠| 🇪🇸 Madrid | 0.59 |
#20 | 🟠| 🇺🇸 New York | 0.57 |
#21 | 🟠| 🇸🇬 Singapore | 0.50 |
#22 | 🟢 | 🇮🇹 Milan | 0.34 |
#23 | 🟢 | 🇧🇷 Sao Paulo | 0.20 |
#24 | 🟢 | 🇦🇪 Dubai | 0.16 |
#25 | 🟢 | 🇵🇱 Warsaw | 0.15 |
Canada’s largest city finds itself at the top of a ranking no city wants to end up on. Toronto’s home prices have been rising steadily for years now, and many, including UBS, believe that the city is now firmly in bubble territory.
Vancouver also finds itself in a similar position. Both Canadian cities have a high quality of life and have thriving tech industries.
Notably, none of the U.S. cities analyzed find themselves in the most extreme bubble risk category. The closest scoring U.S. city was Miami, which sits firmly in overvalued territory (0.5-1.5 range) with a score of 1.39.
Examining the Trends
In recent years, low interest rates helped push home prices and incomes further apart.
For cities in the bubble risk zone, prices have climbed by an average of 60% in inflation-adjusted terms over the past decade, while rents and real incomes increased by just 12%. And, while COVID-19 briefly put a dent in urban demand, rents in the cities analyzed rose at around the same pace as pre-pandemic times.
As a result, all but three of the cities saw positive price growth over the past year from a nominal price perspective:
U.S. cities occupy a number of spots at the top of this chart. Miami, in particular, is seeing strong internal migration patterns, as well as renewed interest from foreign investors.
Hong Kong experienced the biggest one-year nominal drop of all the cities analyzed. The report notes that since around 2019 Hong Kong “has broadly stagnated as the lack of affordability, economic woes, and pandemic restrictions all took a major toll on demand.”
Prices can’t rise forever. According to UBS, most cities with high valuations, price corrections have already begun, or could be right around the corner.
Markets
Visualizing the Major Product Exported by Each U.S. State
Canada is the top destination for products from 21 states.
Visualizing the Major Product Exported by Each State
The U.S. is the second biggest exporter in the world, accounting for over 8% of global exports.
In this graphic by NeoMam Studios, we analyze the primary product exported by each state, as well as its main destination, utilizing data from the U.S. International Trade Administration.
Canada: The Primary Destination
Canada serves as the largest export market for most of the Midwest, while Mexico holds the top spot as the export destination for much of the Southwest and Southeast. Additionally, Canada stands out as the primary importer of products from 21 states, with China and Germany trailing behind as notable destinations.
State | Destination | Top Product Exported | Value (USD) |
---|---|---|---|
Alabama | 🇩🇪 Germany | Transportation equip. | $3,649M |
Alaska | 🇨🇦 Canada | Minerals | $576M |
Arizona | 🇲🇽 Mexico | Minerals | $1,760M |
Arkansas | 🇨🇦 Canada | Processed Foods | $246M |
California | 🇨🇦 Canada | Computer & Electronics | $5,093M |
Colorado | 🇰🇷 South Korea | Processed Foods | $545M |
Connecticut | 🇩🇪 Germany | Transportation equip. | $1,581M |
Delaware | 🇰🇷 South Korea | Appliances | $419M |
Florida | 🇬🇧 UK | Chemicals | $2,447M |
Georgia | 🇨🇦 Canada | Machinery | $1,629M |
Hawaii | ðŸ‡ðŸ‡° Hong Kong | Transportation equip. | $68M |
Idaho | 🇹🇼 Taiwan | Computer & Electronics | $394M |
Illinois | 🇨🇦 Canada | Transportation equip. | $4,517M |
Indiana | 🇨🇦 Canada | Transportation equip. | $6,561M |
Iowa | 🇨🇦 Canada | Machinery | $1,598M |
Kansas | 🇲🇽 Mexico | Agricultural | $1,543M |
Kentucky | 🇨🇦 Canada | Transportation equip. | $3,630M |
Louisiana | 🇨🇳 China | Agricultural | $11,300M |
Maine | 🇨🇦 Canada | Oil & Gas | $504M |
Maryland | 🇫🇷 France | Transportation equip. | $949M |
Massachusetts | 🇨🇳 China | Machinery | $1,298M |
Michigan | 🇨🇳 China | Transportation equip. | $15,361M |
Minnesota | 🇨🇦 Canada | Petroleum & Coal | $2,787M |
Mississippi | 🇵🇦 Panama | Petroleum & Coal | $2,106M |
Missouri | 🇨🇦 Canada | Transportation equip. | $2,390M |
Montana | 🇨🇦 Canada | Minerals | $153M |
Nebraska | 🇲🇽 Mexico | Agricultural | $933M |
Nevada | 🇨🇠Switzerland | Metal | $1,399M |
New Hampshire | 🇩🇪 Germany | Transportation equip. | $695M |
New Jersey | 🇨🇦 Canada | Chemicals | $2,734M |
New Mexico | 🇲🇽 Mexico | Computer & Electronics | $2,014M |
New York | 🇨🇠Switzerland | Metal | $18,262M |
North Carolina | 🇨🇳 China | Chemicals | $4,312M |
North Dakota | 🇨🇦 Canada | Petroleum & Coal | $1,441M |
Ohio | 🇨🇦 Canada | Transportation equip. | $5,990M |
Oklahoma | 🇨🇦 Canada | Machinery | $418M |
Oregon | 🇨🇳 China | Computer & Electronics | $6,261M |
Pennsylvania | 🇨🇦 Canada | Chemicals | $2,280M |
Rhode Island | 🇮🇹 Italy | Waste & Scrap | $321M |
South Carolina | 🇩🇪 Germany | Transportation equip. | $3,774M |
South Dakota | 🇨🇦 Canada | Processed Foods | $297M |
Tennessee | 🇨🇦 Canada | Transportation equip. | $2,017M |
Texas | 🇲🇽 Mexico | Petroleum & Coal | $33,627M |
Utah | 🇬🇧 UK | Metal | $6,805M |
Vermont | 🇹🇼 Taiwan | Computer & Electronics | $447M |
Virginia | 🇮🇳 India | Minerals | $1,799M |
Washington | 🇨🇳 China | Agricultural | $10,553M |
West Virginia | 🇮🇳 India | Minerals | $657M |
Wisconsin | 🇨🇦 Canada | Machinery | $1,802M |
Wyoming | 🇮🇩 Indonesia | Chemicals | $200M |
When it comes to the types of exports, transportation equipment emerges as the primary source for the majority of states, with minerals and ores, chemicals, and computer and electronics following closely behind.
For instance, North Carolina ships $4.3 billion worth of chemicals to China, marking one of the longest-distance trade flows among states. Meanwhile, Florida boasts one of the most diverse export portfolios, engaging in trade with Europe, South America, and the Caribbean.
Louisiana heavily relies on the export of agricultural products to China, which contributes significantly to its total GDP. Similarly, Michigan’s transportation equipment exports to Canada constitute a noteworthy portion of the state’s GDP.
In Oregon, exports of semiconductors and other computer parts to China, driven by companies like Intel and Micron, play a crucial role in the state’s economy. Meanwhile, Utah predominantly exports primary metal manufacturing goods to the United Kingdom.
The biggest exporter in the country, Texas, sees a significant portion of its GDP attributed to exports to Mexico, further underlining the state’s economic ties with its southern neighbor.
-
Misc4 days ago
Visualized: The Most Followed People on Instagram in 2024
-
Stocks1 week ago
Will Tesla Lose Its Spot in the Magnificent Seven?
-
Technology1 week ago
Charted: The Jobs Most Impacted by AI
-
Markets1 week ago
Visualizing the Biggest Companies on Major Stock Exchanges
-
Money1 week ago
The World’s Top 50 Largest Banks by Consolidated Assets
-
Demographics1 week ago
Visualizing the Declining Birth Rate in Japan
-
Technology1 week ago
The World’s Largest Corporate Holders of Bitcoin
-
Misc1 week ago
A Map of Global Happiness By Country in 2024