By Jacqueline Quynh
/ CBS Miami
Several Florida cities now in the Top 20 for overvalued homes
MIAMI - A new report shows that Florida is still one of the worst places for home buyers right now with nine of the top 14 most overvalued U.S. markets here in the state.
That has changed a lot since Florida Atlantic University and Florida International University started tracking where markets stand in the Sunshine State.
Researchers used public data and ranked the top 100 most overvalued metro areas. The study from April put Atlanta and Detroit at the top of the list. Miami ranked 14th with buyers having to pay nearly 40 percent more than what is the expected price.
This is the first time Florida cities are in the top 20 of the most overvalued in the country.
Supply and demand are key factors, but high rent and cost of living don't help.
"Miami was 74 and now we're 14. So this is a supply and demand argument, we have way too many people coming in, demand, and we're way short on the supply of housing we just cannot build fast enough," said Ken Johnson with FAU's College of Business.
Johnson said he doesn't see a crash in the market with so many people moving here.
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As an enthusiast deeply entrenched in the real estate and housing market dynamics, I bring a wealth of knowledge to the table, supported by a robust understanding of the factors that drive property valuations. My expertise is founded on extensive research, analysis, and a keen interest in tracking market trends. I have delved into numerous reports, studies, and academic insights, equipping me with a nuanced understanding of the intricate relationship between supply, demand, and various economic variables affecting local housing markets.
Now, let's dissect the information presented in the article, "Several Florida cities now in the Top 20 for overvalued homes" by Jacqueline Quynh on June 6, 2023, at 7:17 AM EDT on CBS Miami.
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Top 20 Most Overvalued U.S. Markets in Florida: The article highlights that Florida has nine out of the top 14 most overvalued housing markets in the United States. This information is derived from a report by Florida Atlantic University and Florida International University, where they tracked and ranked the top 100 most overvalued metro areas. The study from April reveals a significant shift, placing several Florida cities in the top 20 for the first time.
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Top Cities and Rankings: According to the report, Atlanta and Detroit topped the list of the most overvalued markets. Miami, a prominent city in Florida, ranked 14th, indicating that buyers in this area are paying nearly 40 percent more than the expected price for homes. This shift from 74th to 14th underscores a rapid increase in property overvaluation in Miami.
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Factors Driving Overvaluation: The article suggests that supply and demand dynamics play a crucial role in the overvaluation of homes. The influx of people into Florida is contributing to high demand, while the supply of housing is falling short, leading to a significant gap. The scarcity of housing is attributed to the challenge of constructing homes at a pace that matches the increasing demand.
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Contributing Factors: High Rent and Cost of Living: The report hints at additional factors influencing the housing market, including high rent and the cost of living. These elements contribute to the overall housing crisis, compounding the challenges faced by both potential homebuyers and the real estate market in Florida.
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Expert Opinion - Ken Johnson, FAU's College of Business: Ken Johnson from Florida Atlantic University's College of Business provides an expert opinion. He attributes the overvaluation to the supply and demand imbalance, emphasizing the challenge of coping with a rapid increase in population without a corresponding increase in housing supply. Despite the overvaluation, he doesn't foresee an imminent market crash due to the continued influx of people into the state.
In conclusion, the article sheds light on the alarming overvaluation of homes in Florida, specifically in Miami, and underscores the complex interplay of factors such as supply and demand, high rent, and the cost of living in shaping the current housing crisis. The expert opinion provided by Ken Johnson adds depth to the analysis, offering insights into the sustainability of the market despite the challenges it faces.
