Homes Overvalued by 50% or More in 15 Markets
Work-from-anywhere culture makes buying in Boise the least affordable market.
The high cost of housing across the country is playing out in once-remote markets and major metropolitan areas, making homeownership unattainable for many Americans and a risky bet for others.
Led by Boise and Austin, four US housing markets are overvalued by more than 60 percent and 11 others are overvalued by more than 50 percent, according to researchers at Florida Atlantic University and Florida International University.
Boise proved to be the land to discover for many remote workers in the past two years, taking advantage of the “work from anywhere” environment.
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 percent above the area’s long-term pricing trend, Florida Atlantic University and Florida International University researchers said in a report this week.
Austin homebuyers are paying 67 percent more than they should. Buyers in Ogden, Utah, (64.73 percent) and Las Vegas (61.48 percent) also are demanding more than the assumed top dollar.
Atlanta, Phoenix and Provo, Utah lead a contingent of communities overvalued by more than 50 percent. Meanwhile, Fort Myers, Fla., is becoming increasingly more unaffordable according to the research report.
“Near-record-low mortgage rates helped fuel demand for housing, especially during the pandemic, and the competition for homes pushed prices higher,” Ken H. Johnson, Ph.D., an economist in FAU’s College of Business, said in prepared remarks. “But now the Federal Reserve is raising rates to curtail inflation, and already that’s cooling demand.”
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.