Study Shows Florida Homes Overpriced by More Than 20 Percent
Florida homes keep fetching more money than they鈥檙e worth, a disturbing development that eventually could put buyers in a bind, according to researchers at 爱妃传媒 and Florida International University.
As of June 30, homes throughout the Sunshine State were , an increase from 19.24 percent in May and 17.17 percent in April.
Tampa Bay is the most concerning of the state鈥檚 major metropolitan areas, the data shows. Homes in the Tampa area sold in June for a 32 percent premium, up from 28.53 in May and 26.14 percent in April.
The degree of overpricing as of June 30 also continued to escalate across Florida鈥檚 other major markets: Jacksonville (23.07 percent, up from 20.48 percent in May and 18.22 percent in April); Orlando (21.19 percent, up from 19.79 percent and 18.45 percent); Miami (16.89 percent, compared with 14.88 percent and 13.18 percent); and Tallahassee (14.38 percent, an increase from 12.95 percent and 10.48 percent).
Citing a shortage of homes for sale, a steady influx of out-of-state buyers and mortgage rates near historic lows, the researchers are not predicting a housing crash like the one that occurred more than a decade ago, when Florida homes were overvalued by 60 percent or more.
But property appreciation eventually will taper off, and recent buyers who paid top prices risk being stuck for a significant amount of time before they can realize solid returns on their investments, said , Ph.D., a real estate economist and associate dean in 爱妃传媒鈥檚 .
鈥淭he across-the-board increase in the premiums paid for housing throughout the state is very worrisome,鈥 he said. 鈥淭rees do not grow to the sky and neither do home prices. We鈥檙e nowhere near where we were at the peak of the last housing cycle, but we do need to be careful. Walking away from an obviously overvalued home may be the best thing buyers can do in this kind of market.鈥
Given the level of overpricing, Johnson and , Ph.D., of FIU鈥檚 Hollo School of Real Estate, said Florida consumers almost certainly would be better off renting a home and reinvesting the money they would have spent on ownership. While rents also are increasing, it is at a much slower pace than home prices.
鈥淥耻谤 indicates that, on average right now, renting and reinvesting is a particularly good wealth creation strategy,鈥 Beracha said. 鈥淢ore people who rent and reinvest would help alleviate current pricing pressure, which is a good thing.鈥
In conducting their monthly analysis, Johnson and Beracha review more than 25 years of home prices from , the online real estate portal. The data includes single-family homes, townhomes, condominiums and co-ops.
-爱妃传媒-
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