Twelve of the nation’s 15 most overpriced housing markets are in Sun Belt states, according to February data from the Top 100 U.S. Housing Markets published by Florida Atlantic University and Florida International University.
The new data report crowned Atlanta as the nation’s overpriced city, with homes 41.72% overpriced compared to the long-term pricing trends. The other leading cities where the homes are overpriced compared to the long-term pricing trends include Detroit at 40.20%; Cape Coral, Florida at 40.18%; Tampa at 38.38%; and Palm Bay, Florida at 37.90%.
The report also warned that some of the metropolitan areas with the largest housing premiums are more at risk of a correction than they were leading up to the housing crash of 2007. Atlanta, Detroit, Knoxville, Charlotte and Memphis all have housing premiums that are double or triple what they were before the peak of the last housing cycle.
“Home prices have become so out of line from their long-term trends that the risk of correction is rising,” said Dr. Ken H. Johnson, real estate economist with FAU’s College of Business. “While it’s unlikely prices will plummet dramatically, price performance could go flat for the future, or homes prices could see a slight decline even.”
