Florida homes overpriced by more than 20%, FAU study finds
Florida homes keep fetching more money than they’re worth. According to a Florida Atlantic University study, Florida homes are overpriced by more than 20%.
Tampa Bay is the most concerning, Homes sold in June for a 32% premium, up from almost 29% in May.
Jacksonville was just over a 23% increase, up from 20% in May. Orlando was up 21%, and Miami was up 17% in June compared with 14% in May.
Buying a house right now is competitive.
"We looked at a house, at least one to two a week, over the course of several months," said Gabe Clements.
Clements said his family found a new home and said 12 other people did the same day
"11 of them submitted offers, and all of them were above the asking price, including us, so we had to come up with concessions," Clements said.
FAU real estate economist Ken Johnson said they started to follow the price of homes in May and noticed that in Florida homes are overpriced by 20%
"We are shocked," Johnson said.
He added these numbers are high and are similar to the cycle in 2006 when numbers were close to 60%.
"We are not approaching the territory yet that we saw 15 years ago," Johnson said. "The single-family home market is the one that is kind of crazy right now."
ReMax Serves owner David Serle said their agents are seeing the demand outrun the supply.
And Johnson said that's exactly what is happening. The COVID-19 pandemic created an inventory shortage, and then mix that in with an influx of people moving to Florida, and there are not enough homes for sale.
Johnson predicts the market will correct itself over time. He advises anyone looking to invest in a home for equity to wait for that correction
"I would avoid buying at the peak of this cycle which I fear is the peak and I would think of renting and reinvesting," Johnson said.
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