Fort Myers is cementing itself as one of the most overvalued housing markets, according to the monthly Beracha and Johnson Housing Market Ranking from Florida Atlantic University (FAU).
FAU released its monthly report on Tuesday, noting that major housing markets in the Sunshine state continue to be hammered by the ongoing housing crisis. Fort Myers, a popular vacation and retirement haven south of Tampa, remains the most overvalued housing market in Florida, and ranks 8th in the country — moving into the top 10 for the first time.
The report found that homes in Fort Myers are being purchased at a nearly 56% premium, putting the market ahead of Lakeland (No. 12), Tampa (No. 13), North Port-Sarasota-Bradenton (No. 17), and Melbourne (No. 19).
Four other Florida metropolitan areas cracked the top 50, including Daytona Beach (No. 21), Orlando (No. 25), Jacksonville (No. 28), and Miami-Fort Lauderdale (No. 49).
Boise, Idaho, long considered a distant outpost far from big-city job centers, leads the nation in overpriced housing. Boise’s pricing history suggests homes now should cost an average price of $299,202, although the typical buyer is paying $516,548 – 72.64% above the area’s long-term pricing trend.
No. 2 Austin, Texas is quickly gaining ground, with buyers paying 67.70% more than they should. Buyers in Ogden, Utah (64.73%) and Las Vegas (61.48%) also are paying significant premiums to live there. Additionally, Atlanta (No. 5), Phoenix (No. 6) and Provo (No. 7) lead a contingent of communities overvalued by more than 50 percent.
“Near-record-low mortgage rates helped fuel demand for housing, especially during the pandemic, and the competition for homes pushed prices higher. But now the Federal Reserve is raising rates to curtail inflation, and already that’s cooling demand,” said Ken H. Johnson, Ph.D., an economist in FAU’s College of Business.
A looming slowdown could help people priced out of the market get into homes, but it also may be a serious concern for some consumers, Johnson added.
“If we’re not at the peak of the current housing cycle, we’re awfully close,” he added. “Recent buyers in many of these cities may have to endure stagnant or falling home values while the market settles – and that’s not what they want to hear if they had planned to resell anytime soon.”
Each month, Johnson and Eli Beracha, Ph.D., of FIU’s Hollo School of Real Estate, rank the most overvalued housing markets of America’s 100 largest metros by determining the premiums buyers are paying. The larger the premium, the more overpriced a market is. The researchers’ data dates back to 1996 and covers single-family homes, townhomes, condominiums and co-ops.
To view the full rankings, click here.