Philadelphia-area home values continued to show a less-precipitous decline than other major metropolitan areas in the first quarter, a new study said today.

Global Insight, the Lexington, Mass., economic forecasting service, said home prices in the eight county region were about 4.1 percent above what they should be, given population density, relative income levels, interest rates, and historically observed market premiums or discounts.

In the first quarter of 2007, prices were considered overvalued by 10.1 percent. The difference in median price year over year is $1,100, to $235,200 from $236,300 in the first quarter of 2007.

Credit the Philadelphia suburban market for the continued better-than-elsewhere numbers, said Wharton economist Kevin Gillen.

"The suburbs have held their value better than the city because only modest amounts of new construction took place there," he said. "So, when you average the suburbs with the city, things in the city can look rosier than they are."

Markets with valuation premiums above 35 percent were deemed at risk for price corrections. Even at the height of the market, in 2006, Philadelphia home prices were only considered 15 percent higher than they should be, according to Global Insight.

Compare that with San Diego, where prices were more than 35 percent higher than they should have been in 2005, and Miami, where they were 52.7 percent higher just a year ago.

San Diego's prices are now undervalued by 9 percent, while Miami's are still 27 percent above what Global Insight says they should be.

In the rest of the nation, "prices are being pushed down by fewer high-end sales and an abundance of foreclosed properties being sold at discount," said Jeannine Cataldi, Global Insight senior economist.

"Contributing to the downward pressure are significantly tighter credit standards, which are reducing the amount of borrowing available for home purchases," she said.

The Commerce Department reported today that single-family construction fell in April for the 26th straight month, although, was the smallest percentage drop in six months.

Multifamily construction increased 0.4 percent, the department reported.