Fort Myers is in the top ten most overvalued home markets in the USA

Fort Myers is in the top ten most overvalued home markets in the USA

House prices in the USA are still unaffordable for many Americans. In some cities, buyers are paying premiums of up to 60%. According to a study conducted by the Florida Atlantic University and the Florida International University this year, no city in the US is more overvalued than Boise, Idaho. In this research, experts identified the difference between the expected prices and the prices actually paid by homebuyers.

The study showed that many factors, including migration of remote workers, caused 73%-premiums on Boise real estate. According to the research, local homes should cost $299,202 but they have been actually selling for $516,548 in the current year.

On the other hand, homebuyers in Baltimore, Maryland, pay the smallest premiums – an average of 2.6%. The smallest difference between the expected and the actual prices was also recorded in Honolulu, Hawaii (2.9%), and New York (3.6%).

The top ten most overvalued housing markets in the USA also included:

  1. Boise, Idaho (73%).
  2. Austin, Texas (68%).
  3. Ogden, Utah (65%).
  4. Las Vegas, Nevada (61%).
  5. Atlanta, Georgia (58%).
  6. Phoenix, Arizona (58%).
  7. Provo, Utah (57%).
  8. Fort Myers, Florida (56%).
  9. Spokane, Washington (56%).
  10. Salt Lake City, Utah (56%).

Are American house prices growing?

US mortgage rates increased by almost three-fourths of a percentage compared to early 2021. Meanwhile, house prices grew by 18.8% by the end of 2021. These numbers suggest that finding an affordable home is more challenging now than ever before. Some markets, however, can still offer affordable options.

As already mentioned, Boise, Idaho, is at the top of the list of the most overpriced homes. Two other cities have also achieved an impressive performance. Las Vegas, Nevada, moved from the seventh to the fourth place in two months, as the difference between the expected and the actual prices increased by another 6%. Atlanta, Georgia, climbed from the tenth to the fifth place, the difference growing by 7%.

What can the American real estate market expect?

The housing market has already become unaffordable for most Americans: mortgage rates are growing, while house prices are almost 20% higher than last year. Experts forecast that most buyers will not wait for the market to cool down. “If we’re not at the peak of the current housing cycle, we’re awfully close,” says Ken Johnson, Economist at the Florida Atlantic University.

However, the low supply and the high demand from potential home buyers currently keep the prices high. 54% of Americans who have recently purchased real estate declared that they had to pay a premium.

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