Sunday, May 19, 2024

Study finds three Tampa Bay cities among the most overvalued housing markets in America


Study Finds Three Tampa Bay Cities Among Most Overvalued Housing Markets in America

The housing market in the Tampa Bay area is booming, but a new study from Florida Atlantic University reveals that it may be overvalued. According to the study, home buyers in Tampa are paying a 42.81% premium for a home, making it the third highest in the country behind Cape Coral and Atlanta.

Seven out of the top 10 overvalued markets are in Florida, with Lakeland and North Port also ranking in the top 5. Home buyers in Lakeland paid a 41.96% premium, while buyers in North Port paid a 41.74% premium.

Real estate economist Ken H. Johnson from FAU stated that prices in Florida have remained robust, causing premiums to rise throughout the state. Demand and low supply are the driving factors in higher prices in Florida, despite higher interest rates.

While there may be little risk in purchasing a property now and holding it for five to eight years, the strategy of buying now and selling in 12 to 24 months for a quick profit may not work. The study produces a list of overvalued housing markets every month using data from Zillow and comparing the average home price in a city with the long-term pricing trend.

To see the full rankings of overvalued housing markets, click here.

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