Many discussions about inflation in recent months have focused on real estate prices in particular. Homeownership has become an elusive goal for many new families and young professionals as demand for properties surged.
The price of renting or purchasing real estate has shifted substantially in recent years. Florida has seen significant growth in home values, which may make some people nervous. They may recall the price inflation that preceded the 2008 real estate market crash and worry that they could end up underwater on the mortgage they take on to buy a new home.
Those thinking about acquiring real estate or making investment purchases in particular may worry about the current state of the market in Florida. Does Florida have abnormally inflated real estate prices?
Some areas have significantly inflated prices
When looking at what homes should potentially be worth given average income, average prices in major markets and other factors, some markets are far more inflated than others. Researchers from Florida Atlantic University looked at housing markets to evaluate which ones were the most overpriced.
The results revealed that five of the 10 most inflated markets are right here in Florida. Atlanta and Detroit top the list. They both have a 41% discrepancy between the expected home value and current listing prices.
The third place on the list goes to Cape Coral, Florida, where the current prices are 38% higher than the expected home value. Tampa takes sixth place on the list, with a 37% difference. Palm Bay is next, with a 36% difference. Both Orlando and Lakeland have a 35% discrepancy in home pricing.
Those looking to purchase real property in Florida may need to be particularly careful about evaluating a property’s value if they intend to purchase in one of the most inflated markets. For those looking to sell, the high current listing price for properties might make this an excellent time to liquidate holdings in certain areas.
Tracking the real estate market overall can be beneficial for those who want to complete a real estate transaction in the next few years. Timing real estate transactions based on the market can be a savvy move for prospective buyers and sellers.