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15 Most Overpriced Housing Markets

By Marc Rapport - Aug 6, 2022 at 11:35AM
Luxury bedroom with glass windows overlooking snowy mountain.

15 Most Overpriced Housing Markets

From the mountains to the sea and not much in between on this list of potentially overpriced housing markets

The pandemic and low interest rates helped drive an unprecedented surge in home prices in America, driving the median price of an existing home to $416,000 in June, according to the National Association of Realtors.

But now, interest rates have jumped, inflation is soaring, and a recession could be on the way. Buyers and sellers alike should be aware of how that affects the value of houses in their markets. The Beracha and Johnson Housing Market Ranking is a good place to start.

Professors Eli Beracha and Ken Johnson at Florida International and Florida Atlantic universities, respectively, use a group of open-source housing indexes to come up with their list each month to assess how much our 100 largest markets are over- or underpriced.

Here are their 15 most overvalued markets.

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A view of a waterside park in Sarasota, Florida.

15. North Port-Sarasota-Bradenton, Florida

This tripartite Gulf Coast market gets a 55.04% premium over the historic implied price in the Beracha and Johnson index. Realtor.com says the median listing price in Bradenton alone has jumped a blistering 40% year over year to $569,900 and that homes are selling for around the asking price in what the big listing service says remains a sellers' market.

ALSO READ: How to Invest in Real Estate: A Complete Guide

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A view of the Salt Lake City skyline that includes the Mormon Cathedral and mountains.

14. Salt Lake City, Utah

Salt Lake City's median listing price jumped "only" 20.9% since last year, but that's enough to put the median listing price at $579,000 and the average price per square foot at a lofty $328. The Beracha and Johnson ranking says the asking price is a premium of 56.07% over what it probably should be by historical standards.

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Spokane, Washington's Riverfront Park.

13. Spokane, Washington

Spokane housing prices are at a premium of 56.15%, meaning that's how much the professors' statistical modeling shows this market is over its historic implied price. Realtor.com says the median listing price in that market is $445,000, up about 20% from last year. Homes sold for an average of 1.5% above asking price in June, making finding a bargain a bit tough for the enterprising investor looking for a flip.

ALSO READ: The House Flipping Statistics Investors Should Know in 2022

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A view of the skyline of Raleigh, North Carolina, with a park in the foreground.

12. Raleigh, North Carolina

The Florida professors say house prices are at a 56.29% premium over their historic implied prices in North Carolina's capital city. The median listing price there is $432,500, also up about 20% from last year. And Realtor.com says Raleigh's sales prices were averaging 1.64% above asking prices.

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Tampa, Florida, cityscape.

11. Tampa, Florida

Tampa has been at or near the top of national hottest markets lists for a while now. The city's average home is selling for a premium of 57.97%, the Beracha and Johnson index shows. Realtor.com says the median price for a home sold in June was up 26% from last year, at $435,000. There were 3,594 homes listed for sale at this writing, ranging from $15,800 to $16 million.

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Exterior of Florida luxury home.

10. Lakeland, Florida

Lakeland is a neighboring market just east of Tampa -- not as big but just as hot -- with a premium of 58.1% fueled by a 29.6% rise in median prices just in the past year. The median price, according to Realtor.com, is $349,900, and at this writing, there were 1,516 homes listed, generally being sold for the asking price.

ALSO READ: How I Got My House at a Good Price in a Seller's Market

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Buildings line a street in the city of Provo, Utah, with mountains very close in the background.

9. Provo, Utah

Number 9 on this list is the Provo, Utah, metro, home to Brigham Young University and perched at about 4,500 feet above sea level. Home prices here are priced at a premium of 58.11%, according to the Beracha and Johnson index, and Realtor.com pegs the median listing price at $449,500, with sticker prices ranging from $75,000 to $17 million -- lots of range in these mountains.

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A jetliner lands in Charlotte, North Carolina, with a view of the uptown skyline.

8. Charlotte, North Carolina

The Sun Belt continues to dominate this list of possibly overpriced markets, with high-flying Charlotte coming in at a premium of 58.87% and asking prices up 19.4% year over year. Realtor.com shows 4,515 homes for sale in the big Carolinas market, with a median listing price of $430,000.

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A view of the Phoenix, Arizona, skyline with mountains in the background.

7. Phoenix, Arizona

The Valley of the Sun is scorching-hot right now, both under the summer sky and in a housing market that has prices 60.15% higher than historical data says they should be. Realtor.com says the 6,589 homes listed at this writing have a median price of $489,000, up 22.6% from last year, and homes typically sell for about the asking price.

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Person in park looking at the Atlanta city skyline.

6. Atlanta, Georgia

Home prices in Atlanta are only up about 8% year over year, a modest bump by the standards on this list. But the Beracha and Johnson index says they're still 60.84% overvalued. The median home price for the 4,670 homes listed as of this writing was $432,500. Realtor.com says homes here are typically selling for right around the asking price.

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A Florida beach.

5. Fort Myers, Florida

The Fort Myers market on Florida's southwest coast has seen median home prices soar by an eye-popping 38.8% over the past year. The Beracha and Johnson index says that's a 62.31% premium over what the historic data says the city's median price should be. Realtor.com says homes are typically selling for about the asking price.

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High-end home in mountains covered in snow.

4. Ogden, Utah

Ogden is about an hour north of Provo, with Salt Lake City in between. The median price for a home in this popular market has risen by 24.7% over the past year, Realtor.com says. And the professors' index says that's 62.84% over the Ogden market's historic implied price. There were 626 homes for sale here at this writing, with a median listing price of $399,000.

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Road sign that says Welcome to Fabulous Las Vegas, Nevada.

3. Las Vegas, Nevada

The median price of a home in Las Vegas jumped by 25% in the past year to $450,000, a level the Beracha and Johnson index says is a premium of 63.73%. Homebuyers can choose from among 7,990 homes currently listed, says Realtor.com, including a 416-square-foot condo for $117,900 and a 14-bed, 18-bath spread for just under $5 million.

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The beautiful Texas state flag flying over Austin, Texas, skyline.

2. Austin, Texas

Everything's bigger in Texas, including the June median listing price of $659,000 -- the highest on this list -- for one of the 4,446 homes on the market here. And the premium of 65.79% puts the Lone Star State's capital city in second place for the most historically overpriced market in America, at least by the Beracha and Johnson index data.

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Boise, Idaho, cityscape.

1. Boise, Idaho

Our most overvalued market is…Boise, Idaho. This capital city has been a magnet for in-migration because of the lifestyle and modest home prices compared to many of our major markets.

That popularity has led to a premium of 69.20% and a median listing price of $569,900, up 10.7% from a year ago. And Boise was already seeing a pandemic-driven surge in popularity -- fueled, at least in part, by people looking for more space for the money and the option of working at home.

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A red For Sale sign with a black Sold sticker over it in front of a house with a family moving boxes.

Home prices could be cooling as rates keep rising, but all real estate is local

At this writing, the Fed has just raised interest rates by another 75 basis points in its fight with inflation, and the average new mortgage is now several hundred dollars more than it would have cost when rates were at their record lows. But while home price increases are slowing, supply still lags demand in our hottest markets.

How home prices and sales fare in the months ahead remains to be seen and will be closely watched. Keep an eye on your own market, too -- after all, all real estate is local.

The Motley Fool has a disclosure policy.

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