NEW YORK(CNNMoney.com) - Although many overheated U.S. housing markets lost steam during the third quarter of 2005, most still grew less affordable.

That's according to the Local Market Monitor, a real-estate market research provider.

Most overvalued markets The cities where housing prices are most out of whack City  Percent overvalued  Santa Barbara-Santa Maria CA  86%  Naples FL  72%  Modesto CA  71%  San Diego CA  70%  Stockton CA  64%  Riverside-San Bernardino CA  64%  San Jose CA  61%  Sacramento CA  59%  Vallejo-Fairfield CA  58%  Los Angeles-Anaheim CA  57%   Source:  Local Market Monitor

Most undervalued markets Biggest housing bargains in the USA. City  Percent undervalued  El Paso TX  -26%  McAllen-Edinburg TX  -21%  Fayetteville NC  -18%  Memphis TN  -18%  Augusta GA  -17%  Little Rock AR  -17%  Pittsburgh PA  -14%  Indianapolis IN  -14%  Dallas TX  -14%  Houston TX  -13%   Source:  Local Market Monitor

Through the third quarter of 2005, 79 of the 100 surveyed markets had gotten more expensive, relative to what Local Market Monitor calculates as fair value.

At the top of the list for overpriced cities was Santa Barbara, Calif. at 86 percent overvalued. The average home there should cost $308,900, according to the Local Market Monitor. Instead it sold for $573,100. The survey found that only 16 of the markets had gotten less expensive.

Overall, 37 markets were found to be severely overpriced, which meant that they were at least 15 percent more expensive than they should be, and only 6 were underpriced by 15 percent or more. Fifty-seven were deemd to be farily priced.

While the slowdown in price increases seem to indicate the market has peaked, some regions, especially in the red-hot Sunshine State, continue to experience accelerating home prices.

These included Naples, Fla. where prices increased 32 percent in the 12 months through the end of the third quarter. That's after more modest increases of 18 percent in 2004 and 9 percent in 2003.

Other still-booming markets included Phoenix (up 34 percent), Cape Coral/Ft. Myers, Fla. (33 percent), and Deltona/Daytona Beach, Fla. (27 percent).

The level of over-valuation matters in three ways, according to Ingo Wenzer, president of Local Market Monitor. The higher it is, the greater the risk of it correcting; the greater the correction can be; and the longer it will take to return to present-day prices after they fall.

"Once markets are overpriced by 40 percent or so, the risk is pretty high and the adjustment can take five to 10 years," said Winzer.

Below is a list of the 100 markets tracked. See also: Real Estate: Buy, sell hold? and 5 slow-market selling strategies.