They say everything’s bigger in Texas, but when it comes to overvalued homes, the Lone Star State doesn’t hold a candle to Idaho.
A new survey from Florida Atlantic University and Florida International University looks at the nation’s most overvalued homes, with Boise, Idaho, topping the list. Homes in the Gem State sell for a stunning 80.64% premium, based on a history of past pricing.
The work-from-home trend is largely responsible for that. As people moved out of big markets during the pandemic, they looked for less dense areas that still offered attractive amenities. In addition to Idaho, Utah has been an especially popular destination for buyers, the study found.
Of the 100 cities looked at in the study, 95 showed some level of overvalue. The rapid price appreciation should serve as a warning to buyers, say the study’s authors. If you plan to move soon, you could find yourself later selling property at a loss.
“In the Top 10 markets, potential buyers might want to consider renting and reinvesting money that they otherwise would have put into homeownership,” said Ken Johnson, a real estate economist and associate dean in FAU’s College of Business. “Renting and reinvesting has been shown to often outperform ownership in terms of wealth creation.”
Here’s a look at the 10 most overvalued markets and the premium buyers are currently paying:
- Boise, Idaho – 80.64%
- Austin, Texas – 50.72%
- Ogden, Utah – 49.70%
- Provo, Utah – 46.16%
- Detroit, Mich. – 45.57%
- Spokane, Wash. – 45.21%
- Salt Lake City, Utah – 42.41%
- Phoenix, Ariz. – 42.31%
- Las Vegas, Nev. – 41.88%
- Stockton, Calif. – 38.50%
There are still some bargains out there. In Virginia Beach, homes are selling for a 2.46% discount. And you can get a home in Honolulu at a rate nearly 5% below where it should be valued.