According to a study by researchers at Florida Atlantic University (FAU) and Florida International University (FIU), even if housing prices are starting to stabilize across the country, homebuyers waiting for a break in the market may not find it anytime soon.
Price increases have lessened month-to-month in areas like Seattle, where prices only increased about 0.2%; Charlotte, N.C., 0.3%, and only 0.4% in Portland, Ore. Jacksonville, Fla., and Phoenix saw slight price declines of .03%.
“Prices are still moderating in the majority of the country, especially east of the Mississippi,” notes Ken H. Johnson, Ph.D., real estate economist at FAU’s College of Business. “There’s not much price movement. But, once you go west, you see some price declines.”
Despite the beginning stages of a moderation in housing prices, markets throughout the country remain significantly overvalued compared to their long-term pricing trends. It’s a sign that it could be years before prices return to where they should be, and buyers are no longer paying a premium for a home.
Atlanta remains the most overvalued market in the country, with buyers paying an almost 48% premium. The next highest is Detroit, where homes are 45.88% overvalued; Tampa, Fla., 43.09%; and Memphis, Tenn., 42.65%. In Miami, an area that shows little signs of a decline, homes are 38.73% overvalued.
“There’s some concern in buying if you are looking to resell in a short time,” says Eli Beracha, Ph.D. of FIU’s Hollo School of Real Estate. “But, if you are planning on staying in the home for several years, purchasing should perform as well in terms of wealth-creation as renting and re-investing.
“For example, in Miami, there’s no reason to suspect a crash in prices as witnessed 15 years ago when the average property lost upwards of 60% in its value,” he says. “Supply and demand are completely different this time around.”
Photo by Hector Falcon on Unsplash.
