SALT LAKE CITY – Ogden and Salt Lake City rank in the top 10 overvalued markets, which means buyers are paying high premiums to buy homes there.
Rising mortgage rates – which are now at their highest level in 12 years – have yet to depress home prices, with buyers paying premiums in 99 of 100 markets surveyed in a national survey. survey.
Average rates on a 30-year mortgage are now at 5.28%, but markets across the country are still extremely overvalued, meaning buyers are paying more than they should be based on past trends in price.
Only Boise, Idaho saw a decline in its real estate premium in March, but remained by far the most overvalued market, with buyers paying 76.39% of what is traditionally fair market value.
Ogden was ranked the third most overvalued market in the country, with buyers paying a 63.33% premium, with Salt Lake City ranking ninth, with buyers paying 53.77% more for a home than models previous prices would indicate this.
The Florida Atlantic University researchers who conducted the study said buyers weren’t just paying excessively for homes; paying such high premiums means it will be a long time before their homes can be resold at an acceptable profit.
But there is good news; they also say that unlike the housing recession of 2007-2009, when some homes lost more than half their value, the shortage of homes for sale will prevent a similar meltdown.
“At the height of the last housing cycle, we had an oversupply of housing across the country, so when prices started to fall, there was nothing to catch them, and we saw a monumental crash” said Eli Beracha of FAU’s Hollo School. of Real Estate. “The current shortage of homes for sale will help put a floor on lower prices this time around.”
Since areas such as New York and San Francisco have traditionally had high prices, they are considered the least overpriced.
Areas most at risk are such as Detroit and Memphis, where minimal or no population growth could see dramatic price declines.
The full ranking with interactive charts can be found here.