Housing markets throughout the USA have witnessed a normal tightening in inventory in addition to excessive costs, although down a bit from their peaks in 2021 and 2022 earlier than the regiment of fee hikes instituted by the Federal Reserve commenced. Whereas costs could also be down from their latest highs, affordability nonetheless stays a significant situation in lots of main housing markets.
We wished to establish essentially the most overpriced housing markets within the U.S. based mostly, not merely on possessing a excessive sale value, however on key metrics such because the sales-to-list ratio and the share of houses in a metropolis that offered above asking value. To get these metrics, we sourced knowledge from Redfin
Learn on to search out out essentially the most overpriced housing markets in America.
The Most Overpriced Housing Markets of 2023
With the intention to generate a listing of cities, we restricted our scope to the 200 largest cities within the U.S. by inhabitants, per the Census Bureau’s 2021 American Community Survey 5-Year Estimates, the newest knowledge obtainable. From right here, we analyzed the housing markets when it comes to the metrics talked about above, with the 2 most crucial being sales-to-list ratio — which tells you if houses are promoting for greater than they had been initially listed by having a price of over 100% — and the share of houses that offered above their asking value. We then scored all these components and ranked the cities accordingly.
Under you’ll discover a desk detailing the highest 20 most overpriced housing markets in America based mostly on our standards:
Extremely, in Lubbock, each residence offered within the month of July 2023 was offered for above its asking value. No different housing market skilled a fee of 100% of houses offered above asking value. The present median sale value in Lubbock is $350,000, up 45.8% from July 2022 when it was $240,000. Whereas residence costs have risen year-on-year, so has stock in Lubbock. From 659 obtainable houses on the market in July 2022, stock grew by 44.2%, reaching 950 obtainable houses in July 2023. On the similar time, the median days on marketplace for a house on the market in Lubbock leapt up dramatically, by 425%, from 8 days in July 2022 to 42 days in July 2023. Certainly, a separate report by the Lubbock Affiliation of Realtors for July 2023 revealed that houses are spending an estimated 80% extra time in the marketplace in comparison with the identical time final yr, in response to KLBK News.
Within the second most overpriced housing market, Sunnyvale, 81.3% of houses offered in July 2023 had been offered above their asking value. That’s up nearly 30 proportion factors from July 2022, when the share was 52.9%. The year-over-year change in prices in Sunnyvale has additionally been substantial. From a median sale value of somewhat over $1.6 million in July 2022, Sunnyvale’s median value rise by 30.6% to roughly $2.09 million in July 2023. The sale-to-list ratio in Sunnyvale is 106.6%, which is the fourth highest ratio within the examine.
The third most overpriced housing market is Worcester, which is about midway between Springfield and Boston, Massachusetts. Within the Worcester housing market, 76.1% of houses offered in July 2023 offered above their asking value, which is up barely from final July’s 73.9%. Each inventory and the number of active listings have declined year-over-year in Worcester, by 63.4% and 40.3%, respectively. These components are serving to contribute to continued excessive residence costs in Worcester, with the primary month its median sale value reaching $400,000 occurring in Could 2022. Again within the pre-pandemic days, in July 2019, the median sale value in Worcester was solely $269,950. Sadly, it appears these days are lengthy gone.