JACKSONVILLE, Fla. – Florida has nine of the most overvalued housing markets in the country and Jacksonville is in the Top 25, according to researchers at two state universities.
Right now, homes in Jacksonville are selling at an average price of about $360,000. But researchers said they should be selling closer to $275,000, which suggests homes are overvalued by 30%. (Read more about the researchers’ methodology here)
“We did end up having to pay a little bit more on the house that we bought, but it had everything that we wanted,” Jacksonville homebuyers Bryan and Kristen Leahy said.
They said homes were pricier than expected when they first began to search in Jacksonville and the market is still competitive.
”It’s still cheaper than California. So as far as he’s concerned, it’s still much better buying and selling in Jacksonville than it was, you know, trying to purchase a home this size,” Kristen Leahy said.
Of the 100 biggest U.S. housing markets, Jacksonville comes in as the 25th most overvalued. The Top 5 most overvalued markets, according to research, are Atlanta, Detroit, Cape Coral, Tampa and Las Vegas, respectively.
Researchers at Florida Atlantic University and Florida International University analyzed the percentage difference between the expected price of a home and what buyers are paying to get those numbers.
“I wouldn’t say it is something to worry about. Because the demand is going up. And the house prices are going up following that. And that brings up the whole conversation about buying versus renting in this time,” said Andrew “Fletch” Fletcher, a Realtor with RE/MAX Blue Coast.
Fletcher said the increased cost of buying a home means more people are renting.
Data from Realtor.com said that renting a starter home is more affordable than buying one in all 50 metros, including Jacksonville. As of Feb. 2024, the median rent in Jacksonville for studio, 1-bedroom, or 2-bedroom units is $1,518, according to Realtor.com.
“It’s not surprising that it is there right now with all of the uncertainty in the economy right now. And that’s why short term-wise, I actually am going to go against some of my colleagues and say it might be a good time to rent versus buy. But it does depend on how long you’re going to continue to pay rent and not build equity,” Fletcher said. “Is this the best time to go out and look for an investment property to flip? It might not be because of the economic factors but at the same time, there’s a high demand for people. There’s a high demand to move into the area we’re standing in right now. And that’s always an advantage.”