BEND, Ore. -- Bend, Oregon is named the city with the most overvalued homes in the nation, according to one company report.

The National City Corporation study showed that in the last fiscal quarter of 2007, there was a 59 percent overvaluation of homes. The average home price is now about $309,000. In early 2007, it was around $345,000.

Close behind Bend were Portland and Seattle. But the statistics also show that cities in the Pacific Northwest remained robust housing markets compared to most cities in the U.S. right now.

More: See the report

The averages factored in house prices, interest rates, along with household incomes and population densities.

The other good news according to experts is that overvaluation estimates usually soon decline sharply, after market real property values catch up.

Twenty-one cities were said to be overvalued during the fourth quarter of 2007, down from a peak of 58 metro areas in 2006, the study showed.

Bend has been a boomtown as many retirees, along with vacationers and sports enthusiasts move in for the recreational opportunities and the dry, sunny weather of Central Oregon.

“Investors and baby boomers and commuters built up the (housing) market, but boomers and commuters are still coming here,” broker Ruben Garmyn told the Bend Bulletin. “Yes, we are going through a downturn, partly driven by the media, but we are showing lots of property to potential buyers.”

The report had a 15 percent margin of error.