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If you bought a house in one of these Utah cities, you might have paid too much

Western communities dominate list of overvalued housing markets

SHARE If you bought a house in one of these Utah cities, you might have paid too much
A “for sale” sign and “sale pending” sign are pictured in Salt Lake City.

A “for sale” sign and “sale pending” sign are pictured in Salt Lake City on Monday, Oct. 18, 2021.

Kristin Murphy, Deseret News

If you bought a home in Ogden, Provo or Salt Lake City in the last month, there’s a good chance you overpaid.

That’s according toresearchers from Florida Atlantic University, who compiled open-source data from Zillow and other providers in a study that lists the 100 most overvalued markets in the U.S.

The study shows that of the 10 most overvalued housing markets in the country, three are located along Utah’s Wasatch Front — coming in third overall is Ogden, where buyers are paying over 57% more than what their home is valued at, based on past pricing trends.

With a 51% premium, Provo is ranked fifth. Salt Lake City, where buyers are paying over 48% more than they should, is ranked ninth.

Taking the average or expected price change, researchers have been providing a monthly estimate of how much a market’s housing stock is over or undervalued, “relative to its historic pricing,” a press release reads.

Unsurprisingly, the West dominated the top slots. Here are the top 10 most overvalued communities, according to the study.

  1. Boise, Idaho, where homes are selling at a 76.63% premium.
  2. Austin, Texas, at 60.02%.
  3. Ogden, Utah, at 57.36%,
  4. Phoenix, Arizona, at 51.21%.
  5. Provo, Utah, at 51.17%.
  6. Las Vegas, Nevada, at 51.04%.
  7. Spokane, Washington, at 50.04%.
  8. Atlanta, Georgia, at 49.97%.
  9. Salt Lake City, Utah, at 48.51%.
  10. Detroit, Michigan, at 47.64%.

“If you’re buying a home in these metros ... it’s imperative that you know you’re buying close to the peak of the market,” said Ken H. Johnson, an economist at FAU and one of the study’s researchers.

In a press release, Johnson noted that Florida and Ohio are the most represented states on the list — seven markets in Florida and four in Ohio are listed in the top third.

“The danger is that prices will soon level off or even decline, and you’ll be stuck in that home for a significant amount of time before you can sell it at a profit that makes financial sense,” Johnson said.

Ogden, Provo and Salt Lake City are the only three Utah communities listed. But across the board, housing prices in the Beehive State continue to rise while prospective buyers struggle with a lack of inventory.

In 2021, 24 of Utah’s 29 counties had double-digit gains — Utah’s 700,000 homeowners saw an increase in the home equity of at least $82 billion.

“Statewide, housing prices increased by 27%, shattering the 43-year-old record of 20.1% set in 1978,” the Salt Lake Board of Realtors said.

Meanwhile, 2020 remains the best year in Utah’s history for home sales, with 19,202 homes sold in Salt Lake County. Though 2021 was on pace to become the second best year, home sales slowed during the second half of the year.

Dave Anderton, spokesman for the Salt Lake Board of Realtors, told the Deseret News in December that record-high prices and low inventory have turned some buyers off from the market.

“Sales have slowed. We’re coming off a record year, 2020, which we thought was going to be a recession year. It turned out the complete opposite,” he said.