Realtor, October 10, 2023, Is the Housing Market Overvalued? What Buyers Need To Know
Homes in 98 of the 100 largest housing markets are selling above their long-term prices, which indicates that they are overvalued, according to an August analysis from Florida Atlantic University and Florida International University researchers. Only two markets had homes selling at a discount.
One thing most observers agree on: It’s the housing shortage that has kept prices high. Since there aren’t enough properties to go around for all of those aging into prime homebuying years, buyers have been trying to outdo one another with higher and higher offers to win bidding wars.
“There is going to be some adjustment. It could be that prices fall, it could be that incomes grow to catch up, it could be that mortgage rates come back down,” says Realtor.com® Chief Economist Danielle Hale. “Or each of these three things could contribute a little bit over time until we gradually get back to housing taking up a more normal share of income.