Florida's Bay-area City is the Most Overvalued Housing Market in the Entire State

According to figures from Florida Atlantic University, the most overvalued housing market in the state is in the Tampa Bay area. Florida still has more than its fair share of “overvalued” housing markets. Nine of the fifteen “most overvalued and steadily rising metro areas” in the United States are in the Sunshine State right now.

In June, we told you about an FAU study that showed two places in Tampa Bay are in the Top 5, and three cities are in the Top 10. People who want to buy homes in these areas are paying more for houses that wouldn’t normally cost as much.

In the whole U.S., only Atlanta, Georgia, and Detroit, Michigan, have home markets that are more overvalued than Tampa. Yes, Tampa is the most overpriced city in Florida and the third most overpriced city in the whole country. In other words, people buying homes in Tampa are paying about 43% more than what those homes should be worth.

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Also, North Port and Lakeland, which are ranked No. 4 and No. 9 in the U.S., are among the Florida towns where home prices are “significantly” too high. When it comes to Florida, North Port comes in at No. 2, right behind Tampa, and Lakeland comes in at No. 4.

Why are these prices so crazy? Right now, home prices are “stable” because of two main things: higher mortgage rates (nearly 7 percent) keep prices from going up again, and a lack of homes on the market in areas where demand is still high keeps prices from going down.

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“We have a huge demand because more people are moving to Florida and more new households are being formed in the state,” Dr. Eli Beracha of FIU’s Hollo School of Real Estate said. “Millennials are starting families at a rate that has almost never been seen before, which is putting a lot of pressure on the housing market.”

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