ORLANDO, Fla. – Eight Florida housing markets are among the most overpriced in the country, according to a new report, and three Central Florida markets are in the top 15.
The Atlanta, Detroit and Tampa metro areas are the most overpriced in the country, according to the latest data from researchers at Florida Atlantic University and Florida International University.
The researchers use data from the Zillow Home Price Index to calculate the percentage of homes that are overvalued or undervalued above their expected price.
“Imagine if you were going to the supermarket and on average, you paid $1 for a loaf of bread. And today, you were paying $1.25,” said Dr. Ken H. Johnson at FAU. “But it really hits into your budget if you’re paying a premium. So the premium is really nothing more than, ‘What percentage above a typical price would you be paying?’”
For instance, homes in the Atlanta area are running about 47.3% above what their expected price should be. Homes in the Tampa area are running at about 42.6% above expected price.
Top 15 overvalued housing markets
| Metro Area | Percent Above Value |
|---|---|
| 1. Atlanta, Ga. | 47.3% |
| 2. Detroit, Mich. | 46.1% |
| 3. Tampa, Fla. | 42.6% |
| 4. North Port, Fla. | 41.9% |
| 5. Memphis, Tenn. | 41.9% |
| 6. Winston, N.C. | 41.8% |
| 7. Cape Coral, Fla. | 41.7% |
| 8. Charlotte, N.C. | 41.5% |
| 9. Lakeland, Fla. | 40.3% |
| 10. Palm Bay, Fla. | 39.9% |
| 11. Miami, Fla. | 38.9% |
| 12. Jacksonville, Fla. | 38.4% |
| 13. Orlando, Fla. | 38.2% |
| 14. Greenboro, N.C. | 38.1% |
| 15. Deltona, Fla. | 38% |
The data shows home prices in the Metro Orlando area are running at about 38.2% above what the expected value is, according to the Zillow Home Price Index. That makes Orlando the 13th most overpriced market in the country.
The Metro Orlando market includes Orange, Osceola, Seminole and Lake counties.
The Palm Bay metro area, which includes all of Brevard County, is running at about 39.9% above expected value, making it the 10th most overvalued metro area in the country, while the Deltona metro area, which includes Daytona Beach and other parts of Volusia County, is 38% overvalued, making it the 15th overpriced market.
The reasons for the overvaluation in Florida’s housing markets should surprise no one who has been paying attention: too much demand, not enough supply. Johnson points to the influx of people, especially from the Midwest and Northeast, as well as immigrants from the Caribbean, Central and South America.
Johnson also said Florida has not been able to build enough homes, a problem that stems from the last major recession.
“After (the 2008 crash), imagine how many developers got put out of the market that went bankrupt, and that have not come back into the market,” Johnson said. “We just don’t have as many developers as we used to. For 15 years, 15-plus years, we’ve not been building enough units to live in and rent, plus live in and own, so we’re short of rooms all over the state of Florida.”
Johnson is not expecting home prices to fall significantly any time soon.
A new report from the Orlando Regional REALTOR Association shows housing prices for the Metro Orlando area increased in June, even as more people put homes up for sale.
According to ORRA’s State of the Market report for June, the median price for a home in the Metro Orlando area, was $385,000, up from $378,000 in May. Some 5,450 homes were up for sale in June, up from 5,149 homes in May. There were also 3,703 new listings in June, up from 3,459 new listings in May.
Johnson said it’s too early to tell whether the price increase is simply due to the summer selling season, or whether prices are going back up again. He said he expects prices to plateau for a while.
There’s no reason for prices to crash tremendously,” Johnson said. “But also at the same point in time, they’re very expensive. So it’s hard to support prices rising again. So we’re stuck at this stasis, this equilibrium.”
This also means housing affordability will continue to be a problem in Florida.
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