Southwest Florida, still dealing with widespread destruction from Hurricane Ian, has become the nation’s most overvalued housing market, according to Florida Atlantic University (FAU) and Florida International University’s (FIU) overvalued markets report, released this week.
- The Cape Coral-Fort Myers, Florida, metropolitan area surpassed Boise, Idaho, as the market selling at the largest premium, with buyers paying an average of 70.43% above the area’s long-term pricing trend as of the end of August.
- Boise, which previously had a long grip on the top of the list, slipped to No. 2, with buyers paying a premium of 62.66%.
- Florida has five markets among the top 10 most overvalued: Cape Coral-Fort Myers, Palm-Bay-Melbourne at 60.42%, Lakeland at 59.29%, Deltona Beach-Daytona Beach at 59.19% and Tampa at 58.18%.
- The remaining top 10 are Las Vegas, Nevada, at 61.08%; Atlanta, Georgia at 60.03%; Charlotte, North Carolina, at 58.66% and Ogden, Utah, at 57.45%.
- The average home price is $429,775, but the average property should be selling for $252,176, based on statistical modeling of past sales.
According to the report, Ken H. Johnson, Ph.D., an economist in FAU’s College of Business, said the main driver of elevated prices in the Sunshine State is strong demand mixed with a shortage of homes for sale.
“Even with the constant threat of hurricanes, people want to live here in a warm and business-friendly climate,” said Johnson. “Several storms hit the state in 2004 and 2005 and more since then, and there was concern existing residents and transplants may choose to go elsewhere, but the state is as popular a destination as ever. People have short memories when it comes to storms.”
Johnson and Eli Beracha, Ph.D., of FIU’s Hollo School of Real Estate, shared in the report that home prices also are likely to keep rising in Cape Coral-Fort Myers, even in the aftermath of Ian.
“The area already was facing a shortage of homes for sale before the hurricane – and that likely will get worse with so many properties sustaining damage during the storm,” said Beracha. “The properties that are in condition to sell will be that much more valuable.”
For the full report, click here.