Before you go calling, say, San Francisco real estate a bubble that’s just waiting to pop, take a look at this ranking of housing markets around the world.
UBS’s 2017 Global Real Estate Bubble Index lists the cities whose housing markets are at greatest risk of becoming bubbles that could eventually deflate, or worse. The index scores come from the weighted average of other common subindexes, including changes in the price-to-income ratio and the mortgage-to-GDP ratio.
While San Francisco’s market was listed as “overvalued,” it is not deemed a “bubble risk.” In San Francisco, housing prices have gone up 65% over the past five years, not enough to make the city the most expensive place in the U.S. to buy a home (that title currently belongs to nearby San Jose, Calif. — and it’s not even close). San Francisco’s score in the UBS index is pulled out of bubble territory by the city’s “strong economic fundamentals amid the astonishing boom of tech companies,” according to UBS.