Study: Florida Dominates List of Most Overvalued Real Estate Markets

Florida’s metropolitan areas make up six of the 10 most overvalued real estate markets in the nation, according to the latest report from researchers at Florida Atlantic University and Florida International University.

Cape Coral-Fort Myers ranks first, with buyers paying 62.29 percent more than they should, based on sales history in that market. The other Florida markets in the top 10 are: No. 2 Deltona (a 55.51 percent premium); No. 4. Palm Bay-Melbourne (54.55 per cent); No. 6 Tampa (53.54 percent); No. 7 Lakeland (51.99 percent); and No. 10 North Port-Bradenton (48.41).

The only other metro areas in the top 10 are: No. 3 Atlanta (54.88 percent); No. 5 Charlotte (54.04 percent); No. 8 Boise, Idaho (50.83 percent); and No. 9 Las Vegas (48.71 percent).

Full rankings with interactive charts can be found here.

The researchers rank the 100 largest metropolitan areas using publicly available data from the online real estate portal Zillow or other providers. The data, which spans from January 1996 through the end of last month, includes single-family homes, townhomes, condominiums and cooperatives.

The first ranking, in August 2021, had no Florida metropolitan areas in the top 10 list.

“It used to be that you didn’t need a big salary to afford a house in the Sunshine State, but those days are over because this has become a market primarily for relocating buyers and empty nesters,” Ken said. H. Johnson. , Ph.D., real estate economist in the FAU College of Business. “Florida’s relatively low income should make housing affordability a key issue for a long time to come.”

Potential buyers in Florida waiting for the market to cool off are unlikely to see prices drop the way they did between 2006 and 2012, said Eli Beracha, Ph.D., of FIU’s Hollo School of Real Estate.

“We don’t expect home prices to drop sharply because our high rents serve to support current prices,” Beracha said. “Florida is a very difficult market to enter right now unless you have a professional salary or proceeds from the sale of a home in another state.”

Markets with a growing population and a severe shortage of homes for sale will see fewer negative price shocks, while other areas with stagnant or declining populations and more homes on the market could see significant price drops, the researchers said. .

The researchers’ ranking does not consider how expensive a market traditionally is. High-cost areas like New York and San Francisco are among the least overvalued because homes in those metro areas are selling relatively close to where they should be based on historical trends.