TAMPA, Fla. — The housing market — we all know about the high prices and high demand dominating the scene for a while now. But what about the value of these homes?
A report released last week by Florida Atlantic University, in partnership with researchers at Florida International University, shows that Florida continues to have housing markets that are "significantly" overvalued, even with prices starting to come down.
Specifically, two Tampa Bay cities rank in the Top 5 and three cities make up the Top 10. That means homebuyers in these housing markets are shelling out more for homes that typically wouldn't cost as much.
While Atlanta, Georgia, and Detroit, Michigan took the No. 1 and 2 spots respectively, Tampa was a relatively close No. 3.
"Florida is the state where prices are well out of line with historical trends," a news release of the report said.
Data show that as of the end of April, Tampa homebuyers are paying an average of $367,956 for a home that typically would be expected to sell for only an average of $255,552. That's nearly a 44% premium — meaning prices are "above the area's long-term pricing trend that buyers must pay."
Right behind Tampa on the list was North Port at No. 4 and Cape Coral/Fort Myers at No. 5. Both cities show premiums of over 43%.
Other overvalued Florida cities include Lakeland, Palm Bay, Jacksonville, Deltona, Orlando and Miami. You can find the full rankings of cities here.
“Florida is so overvalued almost certainly because of the increased demand to live here combined with a shortage of available housing units,” said Ken H. Johnson, Ph.D., an economist in FAU’s College of Business. “There are just not enough roofs to go around, given our population and Florida’s stature as a prime destination.”
Researchers did express concern that despite Florida's housing prices falling similarly to other states across the U.S., many expect housing prices and rents to remain high. High enough to outpace local annual incomes, FIU Dr. Eli Beracha said.