The housing market has been red hot over the last two years and prices are at all-time highs. With mortgage rates climbing, sales are starting to plunge and the housing bubble alarm is going off. Here are the most overvalued housing markets in this week’s Five For Friday.
#5: Atlanta
Homes in Atlanta are fetching a 58% premium over the actual economic value, according to an ongoing study by Florida Atlantic University. Affordable just a few years ago, Atlanta became a big draw for people escaping New York City and Washington, D.C. Why work in a studio apartment during the COVID-19 pandemic when you can sit on a southern porch sipping a cocktail? If those big city salaries start to dry up, that bubble could deflate.
#4: Las Vegas
Those looking for fun in the sun flocked to the Nevada desert, where homes are selling at a 61% premium. Vegas has been growing for years, thanks to no income tax and more than 300 sunny days a year. But Las Vegas was one of the cities that felt the most pain during the last housing crisis, begging the question: Is this just another gamble in Sin City?
#3: Ogden, Utah
Buyers aren’t only looking for glitz and glam or a major metropolitan area. Homes in Ogden, Utah, are selling at a 65% premium after the state saw some major COVID-19-related migration. Who wouldn’t move to a place that has skiing in the winter with hiking and fishing in the warm weather months?
#2: Austin, Texas
We all have that friend who claims they’re going to pick up and move to Austin. The Texas capital has seen an influx of high profile celebrities and tech workers relocating from California to “Silicon Hills.” It’s no wonder Austin homes now fetch a premium of 67%. No state income tax, the “weird” culture and barbecue are all premiums over California, but these prices are looking more California every day.
#1: Boise, Idaho
The 72% premium in Boise is mostly attributed to its “left coast” neighbors migrating during the pandemic. Low prices attracted overtaxed Californians, creating a housing shortage in Boise, which drove up prices. While experts predict prices nationwide will stabilize, Boise’s one of those markets that could see a 10% drop in the coming years.