The sky isn't falling, it's just lower than it was yesterday

Housing bubbles only happen to inflated people on the coasts, right? Right?

Apocalypse greeters and garden-variety doomsayers have taken some comfort from the fact that housing bubbles, like plagues and locusts, are things that happen to other people. Hedge-fund abacus-twaddlers in New York, permanent vacationers in San Diego, liposuction regulars in Miami, K Street envelope-passers in D.C.

Our hearts go out to them, really they do. But what the hell were they thinking buying a 900 sq/ft condo for $1.7 million dollars? Hey, everyone likes to watch a good flood as long as there's not water in your own basement.

Now, a new report from Economy.com, published in this month's issue of the Atlantic, hints that even the modest people of god's flat and dismal country (that's us) have something to fear. The Single-Family Housing Market Monitor, according to the charticle:

analyzes home-price imbalances in 142 metropolitan areas, comparing actual prices with what the regional market should be able to bear based on personal income, interest rates, construction costs, and housing supply.

(You can find some explanations for the precise methodology in a free sample report from the middle of last year. Around the time the authors start talking about "ordinary least squares regression," you may decide, like I did, to take their word on it.)

The survey's findings for the fourth quarter of 2004: Housing, on average, is overvalued nationwide by some 21 percent. And it's not all the fault of coastal cosmopolitans and living-room speculators. Minneapolis/St. Paul, Economy.com says, has the 22nd most overvalued housing market among 142 metropolitan areas.

Our neighbors in bloated valuations are some of the usual suspects--yet it's surprising to find ourselves living next door. Number 21 is Oakland. Numbers 23 and 24 are San Jose and Chicago.

And at number 25, two slots saner than our own modest metropolis? Those homebuyers would be the wastrels and fools of New York.

(For a competing ranking, CNN/Money claims Minneapolis/St. Paul is 10 percent overvalued--placing 28th among 99 markets.)