Is the West’s housing market overpriced? These Utah, Idaho cities rank as nation’s most ‘overvalued’

A for sale sign is pictured in Salt Lake City on Thursday, July 15, 2021.

A for sale sign is pictured in Salt Lake City on Thursday, July 15, 2021. | Kristin Murphy, Deseret News

Boise tops the most overpriced U.S. markets, with homes selling at 80% premium. Ogden, Provo, Salt Lake City all rank close behind

Three Utah cities are in the top 10 “most overvalued” housing markets in the entire county: Ogden, Provo and Salt Lake City.

Another city in the West — Boise, Idaho — is ranked No. 1 in the nation for its overpriced houses.

That’s according to research that was recently released out of Florida Atlantic University and Florida International University.

The Utah and Idaho cities rose up the ranks among cities in other states like Texas, Michigan, Washington, Arizona, Nevada and California with housing markets that researchers consider “most overpriced” in the United States, the study published Aug. 26 found.

The researchers used open-source data from Zillow or other providers to score the top 100 overvalued or undervalued metro areas in the nation, ranking the cities by a percent premium homebuyers are paying in today’s market based on a history of past pricing.

Here’s how the top 10 rankings landed, according to the research:

Boise, Idaho, where homes are selling at an 80.6% premium.
Austin, Texas, at a 50.7% premium.
Ogden, at a 49.7% premium.
Provo, at a 46.2% premium.
Detroit, Michigan, at a 45.6% premium
Spokane, Washington, at a 45.2% premium
Salt Lake City, Utah, at a 42.4% premium
Phoenix, Arizona, at a 42.3% premium
Las Vegas, Nevada, at a 41.9% premium
Stockton, California, at a 38.5% premium

The typical value of homes in Boise was over $523,300 as of the end of August, up more than 46% over the past year, according to Zillow.

For Ogden, the typical home value is $341,300, for Provo it’s over $448,300, and for Salt Lake City it’s over $565,000, Zillow reports.

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Buyers in the most overvalued markets are paying near peak prices and risk getting stuck in their investment for some time before they can realize returns, said Ken H. Johnson, a real estate economist and associate dean at Florida Atlantic University’s College of Business, one of the researchers who conducted the study.

“In the top 10 markets, potential buyers might want to consider renting and reinvesting money that they otherwise would have put into homeownership,” Johnson said in a Florida Atlantic University research article. “Renting and reinvesting has been shown to often outperform ownership in terms of wealth creation.”

But rent in Utah is far from cheap too. A report released this week found the average rent in five major Utah counties shot up a stunning 45% in just over the past year and a half.

The research out of Florida ranking the three Utah cities at the top of the nation for overpriced housing markets caught the eye of state budget officials, who briefly discussed it during a presentation on Utah’s economic outlook in a legislative committee meeting Tuesday.

Maddy Oritt, senior economist in the Utah Legislature’s fiscal analyst office, …read more

Source:: Deseret News – Utah News

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