Mortgage rates are nearly three-fourths of a percent higher than they were a year ago, and home prices rose nationwide by 18.8% annually in December, making it harder than ever to find an affordable place to live. But in some cities, it’s a lot harder to find a home than others.
Florida Atlantic University and Florida International University have once more ranked the nation’s most overvalued homes, and while Boise continues to top the list, two cities have seen notable leaps in the past two months.
Las Vegas, which was seventh on the list in December, has moved up to the No. 4 spot, as premiums in Sin City have jumped another 6%. Atlanta, meanwhile, jumped from 10th place to fifth, with a 7% increase in housing price premiums.
The study uses open-source data from Zillow and other providers to determine the estimated value of homes and compares that to expected sales prices. And the difference can be striking.
In Boise, for example, the Zillow Home Value Index (ZHVI) price is $506,060, while the expected price is $286,898, a premium of $219,162. Atlanta’s average premium came in at over $118,000. Austin saw a $214,514 difference. And Vegas averaged $141,657.
While some of these cities are still showing up on lists of the fastest-growing markets, researchers say the premium figures indicate housing prices in these areas are poised to flatten in the future, having neared or reached a peak of the current housing cycle. And sellers should brace themselves for a difficult time if they hope to get top dollar in the near future.
Here’s a look at the 10 most overvalued markets, and the amount they are currently overvalued by:
- Boise, Idaho – 76.39%
- Austin, Texas – 62.33%
- Ogden, Utah – 59.19%
- Las Vegas, Nev. – 53.68%
- Atlanta, Ga. – 52.34%
- Provo, Utah – 52.23%
- Phoenix, Ariz. – 51.95%
- Spokane, Wash. – 51.37%
- Salt Lake City, Utah – 49.66%
- Detroit, Mich. – 48.31%
Honolulu remains the most balanced market, with homes selling at just a 0.45% premium.
Read Full Article [Source: www.fortune.com]