Identifying Undervalued ZIPs

The strongest and most consistent predictor of home prices is local incomes. Where incomes are high, so are prices—and when incomes rise in a given area, home prices usually follow. The strong price-income relationship provides a foundation for identify

Home prices track incomes

The strongest and most consistent predictor of home prices is local incomes. Where incomes are high, so are prices—and when incomes rise in a given area, home prices usually follow.

This is because higher-income households have a greater ability and willingness to pay for desirable locations—those with good schools, safety, and s…