Three Utah cities have overpriced real estate markets, says new report

Utah Housing Crunch

(ABC4) – Amid the COVID-19 pandemic, the U.S. has seen a hot housing market. It has been so hot that even a Massachusetts home seriously damaged by fire was listed for $400,000.

Utah is no exception to the booming housing market. In an August report, the Salt Lake Board of Realtors noted home sales had slowed during July. Within the county during the month of July, 1,602 homes sold, including single-family, condominiums, townhouses, mobile, and recreational homes. That is down 25% from the 2,131 home sales in July 2020, according to UtahRealEstate.com. July 2020 set a record for the most homes sold in a single month.

Even Utah home builders are struggling to keep up. Some are reporting a 10 to 12-month wait for homes to be constructed.

Utah’s hot housing market comes with an asterisk, according to a new report – three of the state’s largest cities have overpriced housing. In a new report from Florida Atlantic University, researchers used open-source data from Zillow or other providers to calculate the 100 most overpriced or underpriced metropolitan cities in the U.S.

Here are the top ten most overpriced cities and the calculated premium:

  1. Boise: 80.66%
  2. Austin, Tex.: 55.26%
  3. Ogden: 50.96%
  4. Provo: 47.62%
  5. Detroit: 45.63%
  6. Phoenix: 45.10%
  7. Spokane, Wash.: 45.09%
  8. Salt Lake City: 44.11%
  9. Las Vegas: 43.39%
  10. Stockton, Cali.: 40.34%

The report found just four cities have underpriced markets: New York City, Baltimore, Virginia Beach, and urban Honolulu.

Florida Atlantic University explains the positive percentages show a premium, implying the average property in a metro is selling above its historically implied price. A negative score shows a discount, or that the average property is selling below its historically implied price.

Utah has been ranked the country’s fastest-growing state. During the pandemic, though, the state drew even more people as so many flocked to big cities and headed to states in the West like Utah. Numerous market experts say this contributed to home prices spiking in the state.

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