Florida homes overpriced by more than 20%, FAU study finds

PALM BEACH COUNTY, Florida – Florida homes always make more money than they are worth. According to a study by Florida Atlantic University, Florida homes are over 20% overpriced.

Tampa Bay is the most worrying, with homes selling for a 32% markup in June, up from nearly 29% in May.

Jacksonville was up just over 23%, up from 20% in May. Orlando rose 21% and Miami 17% in June, up from 14% in May.

WPTV

Florida Atlantic University real estate price study, July 2021.

Buying a home is now competitive.

“We looked at a house at least one or two a week for several months,” said Gabe Clements.

Clements said his family found a new home and 12 other people did so on the same day

“11 of them put in bids and all of them were above asking price, including us, so we had to make concessions,” said Clements.

FAU real estate economist Ken Johnson said they started tracking the price of homes in May, noting that Florida homes are 20% overpriced

“We’re shocked,” said Johnson.

He added that these numbers are high and similar to the 2006 cycle when the numbers were close to 60%.

“We’re not approaching what we saw 15 years ago,” said Johnson. “The single-family home market is the craziest right now.”

ReMax Serves owner David Serle said their agents are seeing demand outstrip supply.

And Johnson said that’s exactly what happens. The COVID-19 pandemic caused inventory shortages and then mixed with an influx of people moving to Florida and there aren’t enough homes for sale.

Johnson predicts the market will correct itself over time. He advises anyone looking to invest in a home to wait for this correction

“I would avoid buying at the top of this cycle, which I fear is the peak, and would think of rent and reinvestment,” said Johnson.