Southwest Florida has become the nation’s most overvalued housing market, followed by Boise, Idaho, and Las Vegas, according to researchers at Florida Atlantic University and Florida International University. At the end of August, Cape Coral-Fort Myers buyers were paying an average of 70.43% above the area’s long-term pricing trend (the average home price is $429,775, while the average property should be selling for $252,176). Researchers say prices are likely to continue to rise in southwest Florida even after Hurricane Ian, as the pre-existing housing shortage in the area will only be exacerbated by the storm damage.
Florida has five markets among the top 10 most overvalued, based on the percent over pricing trends. Aside from Cape Coral-Fort Myers, Palm-Bay-Melbourne is No. 4 (60.42 percent); Lakeland is No. 5 (59.29 percent); Deltona Beach-Daytona Beach is No. 7 (59.19 percent) and Tampa is No. 9 (58.18 percent).
The main driver of elevated prices in the Sunshine State is strong demand mixed with a shortage of homes for sale, said Ken H. Johnson, Ph.D., an economist in FAU’s College of Business.
“Even with the constant threat of hurricanes, people want to live here in a warm and business-friendly climate,” he said. “Several storms hit the state in 2004 and 2005 and more since then, and there was concern existing residents and transplants may choose to go elsewhere, but the state is as popular a destination as ever. People have short memories when it comes to storms.”
Johnson and FIU’s Eli Beracha, Ph.D., said home prices also are likely to keep rising in Cape Coral-Fort Myers, even in the aftermath of Ian.
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