Three Utah cities are among the top 10 “Most Overrated” real estate markets in the country: Ogden, Provo, and Salt Lake City.
Another city to the west – Boise, Idaho – ranks # 1 in the nation due to its overpriced homes.
That’s according to a study recently published by Florida Atlantic University and Florida International University.
The cities of Utah and Idaho rose among cities in other states such as Texas, Michigan, Washington, Arizona, Nevada and California with housing markets that researchers in the US consider “most overpriced,” according to the study published on August 26th .
The researchers used open source data from Zillow or other vendors to rank the 100 over- or undervalued metropolitan areas in the country.
This is how the top 10 rankings landed according to the study:
- Boise, Idaho, where homes sell at an 80.6% markup.
- Austin, Texas at a 50.7% premium.
- Ogden with a premium of 49.7%.
- Provo with 46.2% premium.
- Detroit with a premium of 45.6%.
- Spokane, Washington, at a premium of 45.2%.
- Salt Lake City, Utah, at a 42.4% markup.
- Phoenix with a premium of 42.3%.
- Las Vegas at a premium of 41.9%.
- Stockton, California, at a 38.5% markup.
The typical value of Boise homes was over $ 523,300 at the end of August, up more than 46% year over year, according to Zillow.
Typical home value for Ogden is $ 341,300, Provo is over $ 448,300 and Salt Lake City is over $ 565,000, Zillow reports.
Buyers in the most overvalued markets are paying near the top prices and risking being stuck on their investment for some time before they can reap returns, said Ken H. Johnson, real estate economist and assistant dean of Florida Atlantic University’s College of Business, said Ken H. Johnson, one of the researchers who conducted the study.
“In the top 10 markets, potential buyers should consider renting and reinvesting money they would otherwise have invested in their homes,” Johnson said in a research article from Florida Atlantic University. “It has been shown that rental and reinvestment often outperform property in terms of wealth creation.”
But rent in Utah is anything but cheap. A report released this week found that the average rent in five major Utah counties has increased a staggering 45% over the past year and a half.
The Florida study, which ranked Utah’s three cities at the top of the nation for overpriced real estate markets, caught the attention of state budget officials who briefly discussed it during a presentation on Utah’s economic prospects at a Legislative Committee meeting Tuesday.
Maddy Oritt, a senior economist at the Utah Legislature’s Fiscal Analysts Office, referred to the Ogden, Provo and Salt Lake City rankings in her presentation to the Executive Appropriations Committee and called the Utah real estate market “scorching hot” with real estate prices soaring shot last year, though they have been rising steadily for about a decade.
“This current phase of price escalation is the longest in Utah history,” Oritt said. “It started in 2012 and we are still strong nine years later. Since 2014, when prices returned to pre-recession levels, the average home price across the state has risen between 55% and 70%. “
Oritt cited a 17% increase in home prices on the Wasatch front from Q1 2020 to Q1 2021 from $ 341,900 to $ 400,000. New construction is at “record levels,” she said, and vacancy rates in Utah’s most populous county, Salt Lake County, remain at less than 2%.
“So it’s just gaining weight more than ever and showing no real signs of slowing,” she said.
Utah, which has been the fastest growing state in the country for the past 10 years, has been grappling with a housing shortage for years that is fueling an affordable housing crisis. In the past year in particular, Utah and other states like Idaho have seen “insane” property prices, thanks in part to the COVID-19 pandemic, which has thrown the national housing market in turmoil.
Utah lawmakers earlier this year allocated about $ 50 million to affordable housing and homeless initiatives, which they believe would be multiplied to $ 730 million through community donations and investments – but it will likely be years before that investment converted into units.
source https://www.bisayanews.com/2021/09/16/most-overpriced-housing-markets-idaho-utah-cities-top-u-s-list/
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