10 Most Overpriced Housing Markets in America
July 15, 2022
Since the pandemic, the housing markets have experienced an incredible amount of change. Mortgage rates saw record lows and now record increases, remote working has become the new norm for many, and people are fleeing cities for more space. Despite these changes, one thing has remained consistent – home prices continue to rise. Florida Atlantic University and Florida International University performed a recent study using data from Zillow and other sources that calculates where buyers are paying much more than expected in the largest 100 US cities.
According to their data, the most overpriced housing markets are generally not located in typical expensive metros like New York and San Francisco, because even though those cities are pricey, they are not much more expensive than they should be based on historical trends. Here are the top 10 most overvalued housing markets in America.
10 Most Overvalued Housing Markets
10. Salt Lake City, Utah: 57% Overpriced
In recent years, Utah has had an influx of people moving in from all over the country, especially from California. This has caused the housing market to become increasingly competitive, driving up prices. Starting in mid-2020, the average price exploded going from $400,000 to $600,000 in 2022.
9. Charlotte, North Carolina: 58%
Charlotte has been a fast-growing city in the US for almost a decade. Buyers from all over have been flooding in, drawn by the city’s low cost of living and warm weather, but it’s New York that has had the largest group of people move to Charlotte. The pandemic has only helped this migration as people were looking to escape the city for more freedom. 2020 saw a huge uptick in prices as the average cost of a home in Charlotte went from $245,000 to $380,000 today.
8. Provo, Utah: 58%
Provo is the third-largest city in Utah and is located 45 miles away from the state’s capital. The city’s population is made up of mostly Mormons that attend The Church of Jesus Christ of Latter-day Saints and has a college culture centered around Brigham Young University, a college sponsored by the church. Provo also has an abundance of natural scenery and a low cost of living, which has made it a desirable place to live for many people. At the start of the pandemic, the average price for a house was $379, 821 which was $28,837 from the expected price. Today, it’s close to $600,000.
7. Phoenix, Arizona: 59%
With its proximity to nature, and a rising amount of job opportunities in a diverse number of industries, Phoenix, Arizona has caught the attention of many home buyers in recent years. However, Phoenix’s market has been one of the most susceptible to change during the pandemic. In March of 2020, the average price for a home in Phoenix was only $12,000 more than the expected price at $290,712. In May of 2022, the average price of a house and the expected price had a difference of over $177,438.
6. Fort Myers, Florida: 60%
Florida has been a top destination for people looking to relocate in recent years and Fort Myers is one of the state’s most popular cities. The city is known for its beautiful beaches, warm weather, along with a popular destination for vacations and retirement. As the city grows, Fort Myers breaks into the top 10 most overpriced cities for the first time. Unlike other cities, Fort Myers didn’t experience a huge price jump until the end of 2020, going from $261,000 to $422,000 now.
5. Atlanta, Georgia: 60%
Atlanta has been growing for years because of its low cost of living and diverse metro area. The city has been drawing people from all over the country, but especially from expensive cities like New York City and Los Angeles. The pandemic has only increased this trend as people looked to the suburbs of Atlanta to buy a house. The average price of a home in Atlanta was $244,583 in 2020 and is now over $375,000.
4. Las Vegas, Nevada: 63%
Las Vegas may be known for its casinos and nightlife, but in recent years, the city has been growing for its job opportunities and low cost of living. The city’s real estate market has been booming in recent years as more and more people are looking to buy a house in Las Vegas.
Since the start of the pandemic when a house in Las Vegas cost on average $245,755, the average price of a house increased by $129,919.
3. Ogden, Utah: 65%
Ogden, Utah is 40 miles north of Salt Lake City and is considered a gateway into many ski resorts. The town is known to be an outdoor mountain town where residents can enjoy the views or go to the mountains to ski. The town’s population has been growing in recent years as more people are moving to the area for its quality of life, which of course has had an effect on the real estate market. Ogden’s average price for a house skyrocketed during the pandemic, going from $331,695 to $583,863 in May of 2022.
2. Austin, Texas: 68%
Austin is one of the fastest-growing cities in the country. Young adults are moving there because of the bustling nightlife and expanding tech industry. The diverse number of cultures and people are also a huge draw to the city. It wasn’t until the start of the pandemic that the prices in Austin, Texas would greatly depart from the expected price, increasing from $341,680 to around $600,000 in 2022. In merely two years, this amounts to an increase of almost $250,000.
1. Boise, Idaho: 71%
Boise is a mid-sized city that has a lot of beautiful scenery and is incredibly affordable to anyone. The population of Boise has been rising steadily over the past decade but unlike many other cities, most of the new Boise-residents come from inside Idaho with Californians being a distant second. Even with its affordability, the prices of homes in Boise increased rapidly during the pandemic going from an average price of $319,017 to $516,468. The most interesting part about Boise’s rise in prices is that starting in April of 2022, the average house price began decreasing and now the trajectory is downward.
Markets are Expected To Slow Down
If you are looking to buy a house, these numbers might concern you. In fact, another analysis of the real estate market from Moody Analytics found that out of the 392 largest housing markets in the US, 96% of them are overpriced. However, experts are predicting that the rise in prices will slow down and in some cases even drop. The trajectory of Boise, Idaho, which has reportedly had the largest increase in prices, is already on a downward trend. So, if you are looking to buy a house, now might be the time to start shopping.
Looking for more information about the current state of the real estate market? Then check out our two other blog posts titled: