Six of the 25 most overvalued housing markets in the country are in the Sunshine State, which can expect a “prolonged period of unaffordability,” even as prices in other regions of the country cool. A recent study by Florida Atlantic University finds that rising home prices across the country pales in comparison to rates paid in Florida, with the top five overvalued housing markets in the country right here in the Sunshine State. A bubble poses a risk to Florida, where cities like Tampa and Miami have experienced some of the highest peaks in home values in the country over the past year, according to the CoreLogic Case-Shiller S%26P home price index. The rent indicates that, on average right now, renting and reinvesting is a particularly good wealth creation strategy, says Eli Beracha of the Hollo School of Real Estate at FIU.
The South Florida-based firm aims to push the construction of the luxurious Pendry Residences on the Tampa Riverwalk lot that has been empty for more than a decade after Trump Tower Tampa failed to secure funding amid the latest housing collapse. Given the amount of price markups, both Beracha and Johnson agree that it is better for people in Florida to rent a house and reinvest the money they would have spent on the property. Home price surcharges continued to rise in other major Florida metropolitan markets, including Jacksonville (23.07%, up from 20.48% in May and 18.22% in April); Orlando (21.19% versus 19.79% and 18.45%); Miami (16.89%, compared to 14.88% and 13.18%); and Tallahassee (14.38%, an increase of 12.95% and 10.18%) 48%). Florida's Alliance for State Housing Initiative (SHIP) provides money to local governments to help families with very low, low and moderate incomes.
However, recent homebuyers who paid higher prices can wait years before they can realize solid returns on their investments, according to real estate economist and associate dean of the FAU College of Business Ken H. Investors have purchased about a quarter of the available homes in Tampa Bay, according to research by real estate firm RedFin. Florida remains one of the top relocation destinations due to its climate, lack of income taxes and low property taxes. An investigation by Apartment List, a housing analysis firm, reports that Florida leads the nation in rent inaffordability, and nearly 57% of all renters consider themselves burdened by costs.
While most people today can remember the housing crisis in the 2000s, one of the first real estate booms in Florida occurred in the 1920s. The housing market and metropolitan areas with low housing inventories and expectations for future population growth are positioned to withstand the impending housing slowdown, researchers said. In real estate, the median price falls at the point where half of the homes in an area sell above that price and the other half sell below that price. Florida homes continue to sell for much more than they are worth, and recent buyers who paid the highest prices could see their real estate investments pay off much later than they initially expected.
Researchers use publicly available data from the online real estate portal Zillow or other providers.