Study: North Port-Sarasota-Bradenton among nation's most overvalued housing markets
The North Port-Sarasota-Bradenton metro area ranks as one of the 10 most over-valued housing markets in the country, while Cape Coral-Fort Myers is at the top of the list.
The monthly study was conducted by researchers at Florida Atlantic University and Florida International University.
According to the latest report, home buyers in the Sarasota-Manatee market are paying nearly 50% more than they should based on historical trends in the market.
More: Real estateFour in Sarasota-Naples area rated among nation's most powerful in residential real estate
In December, buyers paid an average of $494,732 for a home. They should have paid $333,365.
In Cape Coral-Fort Myers, home buyers paid 62.3% more.
The newest housing report shows six of the nation's 10 most overvalued markets are in Florida. North Port-Sarasota-Bradenton ranked No. 10.
Here are the other four – and how much buyers overpaid by (in December):
No. 2: Deltona, 55.5%
No. 4: Palm Bay-Melbourne, 54.5%
No. 6: Tampa, 53.5%
No. 7: Lakeland, 51.9%
"In particular, Southwest Florida, with its significant shortage in housing units and its growth in population, heading this group is not surprising," said Ken Johnson, an economist at Florida Atlantic University, in an email.
He produces the report, along with Eli Beracha at Florida International University's school of real estate.
"Given rising rents, which drive property values, around Florida, I am not surprised to see Florida metros dominating our premium metric," or the degree to which property is overpriced, Johnson said.
The other metros ranking in the Top 10 in the latest study are: No. 3 Atlanta (54.9%); No. 5 Charlotte (54%); No. 8 Boise, Idaho (50.8%); and No. 9 Las Vegas (48.7%).
From our archivesStudy: Homes overvalued in Southwest Florida by nearly 35%
The researchers rank the 100 largest metros using public data from Zillow and other real estate portals.
The study includes single-family homes, townhomes, condominiums and co-ops. The data used for it dates back to January 1996.
Housing demand remains strong in Southwest Florida
Hurricane Ian has exacerbated Southwest Florida's affordable housing crisis since it made landfall near Fort Myers in late September, as a near-Category 5 storm, causing mass destruction. It has increased demand for housing in the Sarasota County because of the destruction of so many homes to the south. Workers streaming into the region as it rebuilds have also increased the demand.
"Ian, like most hurricanes before it, is highly unlikely to change the demand to live and work in Southwest Florida. Thus, housing prices (and rents) should remain high relative to local incomes for some time to come," Johnson said.
In other words, he said, housing affordability will remain a "significant issue" for a "prolonged period" in the region.
In the first market study, published in August 2021, no Florida metro ranked in the Top 10. Much has changed since then.
“It used to be that you didn’t need a big salary to afford a home in the Sunshine State, but those days are over because this has become a market mostly for move-up buyers and empty nesters,” Johnson said. “Florida’s relatively low incomes should make housing affordability a key issue for a long time.”
Prospective buyers in Florida are unlikely to see prices plummet, with another market correction, or recession, unlike what happened from 2006 to 2012, Beracha said.
“We don’t expect home prices to fall sharply because our high rents serve to support current prices,” he said. “Florida is a very difficult market to break into now, unless you have a professional wage, or the proceeds from a home sale in another state."
This article originally appeared on Naples Daily News: North Port-Sarasota-Bradenton ranks as overvalued housing market
