TAMPA, Fla. — Florida continues to see more than its fair share of "overvalued" housing markets, and the Tampa Bay area is home to the most overvalued housing market in the state, according to data from Florida Atlantic University.
Currently, the Sunshine State has nine out of the Top 15 "most overvalued and steadily rising metro areas" for homebuyers in the United States.
Back in June, we shared an FAU study that revealed 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.
Overall in the U.S., only Atlanta, Georgia, and Detroit, Michigan, have more overvalued housing markets than Tampa. That's right — Tampa ranks No. 3 in the U.S. and No. 1 in Florida when it comes to people overpaying for their new homes.
Here's what that means: Buyers are paying an average 42.56 percent premium for a home in Tampa — close to 43 percent more than what that home should be worth.
North Port and Lakeland also rank high in the list of Florida cities with "significantly" overvalued housing markets, coming in at No. 4 and No. 9 in the U.S., respectively. Narrowing it down to just Florida, North Port is again right behind Tampa at No. 2 while Lakeland clocks in at No. 4.
What's causing these insane prices? Essentially, two factors are keeping the current housing prices "stable" — higher mortgage rates that are near 7 percent, which keep prices from re-escalating; and a limited supply of homes on the market where there is still a high demand is keeping prices from coming down.
“We have a huge demand coming from an influx of population into Florida, as well as more new households being formed in the state,” Dr. Eli Beracha of FIU’s Hollo School of Real Estate said. “Millennials are forming households at a nearly unprecedented rate creating significant demand for housing.”