BOCA RATON, Fla., June 14, 2024 (GLOBE NEWSWIRE) — As many of the Sun Belt states wrestle with some of the highest housing premiums in the nation, metropolitan areas in Texas might have improving options for homebuyers, according to researchers at Florida Atlantic University and Florida International University.
Housing premiums in metropolitan areas measured in Texas are some of the lowest among the Sun Belt states. The typical home in El Paso, Texas is 24.20% overvalued compared to its historical average, end of April data from the Top 100 U.S. Housing Markets shows. It is followed by Dallas at 22.17%; McAllen, Texas at 19.15%; Houston at 16.02%; Austin, Texas at 12.46%; and San Antonio at 11.49%.
Meanwhile, 17 out of the 20 most overvalued measured markets are in Sun Belt states and have housing premiums of more than 30%.
“The housing market in Texas could be well on its way to moderating and offering buyers a better buying opportunity than other measured metros in the Sun Belt states based on historical pricing trends,” said Ken H. Johnson, Ph.D., real estate economist in FAU’s College of Business. “Austin stands out as an ideal option as rents are trading at a discount in the area and the housing premium is only slightly above its long-term average. Rents are often a leading indicator of where home prices will go. Other areas such as San Antonio and Dallas have rents trading at a discount, as well, so it’s likely prices will moderate further in those cities as well.”
The Top 100 U.S. Housing Markets, a monthly index in FAU’s Real Estate Initiative co-produced with Eli Beracha, Ph.D., director of FIU’s Hollo School of Real Estate, measures housing premiums and discounts in the 100 most populated metropolitan areas in the country by looking at the difference in actual average home price in a city and comparing it to the long-term home pricing trend for the same city to calculate how overvalued or undervalued housing markets are using publicly available data from Zillow.
Atlanta continues to dominate the list of overvalued markets with the typical house in the area 40.94% overvalued; Detroit at 40.78%; Cape Coral at 37.60%; Las Vegas at 37.55%; Knoxville, Tennessee at 37.41%; Tampa at 36.98%; Palm Bay at 36.05%; Charlotte, North Carolina at 35.45%; Orlando at 35.10%; and Lakeland at 35.06%.
“These markets have led the nation in terms of housing premiums for the best part of a year. However, rental rates in these cities are mostly beginning to moderate as well but remain behind the Texas markets,” said Beracha. “It is quite likely we are seeing the beginning of slowing home prices in the Sun Belt states, though time will tell.”
CONTACT: Amber Bonefont Florida Atlantic University College of Business 561-757-9188 abonefont@fau.edu
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