According to a report by a Florida Atlantic University professor, there are signs that values of multiple cities in the west have peaked. A report by researchers at Florida Atlantic University and Florida International University shows home-price cooling in the west while continuing to rise in the East.
This is not surprising because the west had a bigger divergence between predicted values and actual prices, partly caused by Covid distortions.
According to the report, Los Angeles, Boise, San Diego, San Francisco, Ventura, and Stockton are developing a “pricing crown,” defined as a leveling off of home price gains that typically precedes a market slowdown. The report finds that homes are overvalued in 98 markets, with only Honolulu and Baltimore offering bargains to buyers.
The report is from November and it should be kept in mind that markets always cool during the fall and winter.
Home prices are continuing to rise in eastern U.S. cities such as Atlanta, Charlotte, Columbus, Fort Myers, Tampa, Memphis, and Nashville. This may be temporary, though, as an increase in interest rates, if the Fed actually raises rates in 2022, could cool the entire U.S. real estate market.
According to the report, Boise is the nation’s most overvalued market, with buyers paying 78.36% more than they should in November 2021, versus historical pricing. Other overpriced markets include Austin, Texas; Ogden, Utah; and Phoenix, according to the report. Other than Phoenix, all these cities were also indicated as being overvalued in Reventure Consulting‘s analysis.
Cities in Florida such as Lakeland (40.58% overvalued) and Tampa (39.94% overvalued) are also are also becoming more overvalued, according to the report.