SALT LAKE CITY — A new study lists three Utah cities among the most overvalued housing markets in the U.S.
The study produced by professors at Florida Atlantic University and Florida International University comes as housing prices continue to skyrocket across Utah, leaving many without the means to become homeowners.
According to the study, the three Utah cities are all among the list's Top 10:
- #3 - OGDEN
- #5 - PROVO
- #9 - SALT LAKE CITY
Professors used average or expected price changes to provide an estimate of how much a market's housing stock is over- or undervalued.
For the three Utah cities in the Top 10, the amounts the study shows people are overpaying for homes is staggering.
The study claims buyers in Ogden are paying over 53% more than they should to buy a house, while that number is 51.17% for Provo and 48.51% for Salt Lake City.
“We get calls all the time, saying I’ve been looking for 6 months now and I still can’t get an offer accepted, what am I doing wrong?,” said Jared Johnson with Infinite Real Estate Group.
Between low inventory and skyrocketing prices, many first-time homebuyers are struggling to make that dream of owning a home a reality.
“They have this vision that we’re gonna wait for things to slow down, but if you look at Utah and the data over the last 40 years, I mean, we’re doubling our home value every 9 years,” said Johnson.
Johnson has been in real estate over the last 12 years, and says right now is tough, but with the right realtor, he believes buyers can find a home.
“Everybody’s just really being rushed,” said Jared.
If you find a home you like, you need to move fast, as well as home inspectors, lenders, title companies, appraisers.
Part of the issue is the little inventory.
“If you look at why we crashed in 2008, versus where we’re at now, we’re in a completely different situation, driven by inventory. The reality is it is a cheaper time to buy than waiting for the market to go down because notoriously interest rates go up,” Johnson added.
Another issue, the population influx.
“With the influx of people, even with interest rates rising, there are still going to be people that want to be here and are willing to pay that price,” said Johnson.
For the markets considered overvalued, the study believes people are buying homes close to the peak of the market.
Ken H. Johnson, one of the researchers of the study says with population influx, and an inventory shortage, record low interest rates have thrown gas on the fire.
Ken says if you are looking to sell and are staying in the Salt Lake area, you’ll run into the same problem as buyers.
“Then once you sell your property, where are you going to move to, it is like a game of musical chairs, you don’t want to be left standing when the music stops.”
Ken says now may also be a good time to rent and reinvest. He says you’ll be paying a premium temporarily, but the housing market will come back.
