Housing market 2022 predictions: Utah, Idaho cities’ prices are peaking
As home prices continue to rise across the country, particularly in the west, a new study suggests that prices will “flatten” in five of the country’s “most overvalued markets”.
These markets include two cities in Utah and several other metros in Idaho, Texas, and Arizona.
That’s according to a study published this month by professors from Florida Atlantic University and Florida International University.
Where do home prices peak?
- A price “kroon” is developing in the five most overvalued markets: Boise, Idaho; Austin, Texas; Ogden and Provo, Utah; and Phoenix, ”an article by Florida Atlantic University published December 2. “This is an indication that housing values in these areas could flatten out.”
“An award ceremony is common when the markets reach the peak of their current real estate cycles,” said Ken H. Johnson, real estate economist and assistant dean of Florida Atlantic University’s College of Business, one of the researchers who conducted the study. “It seems that several areas across the country are at a turning point.”
- In September, researchers from the Universities of Florida Atlantic and Florida International ranked Boise, Idaho, the No. 1 “overvalued” housing market in the country, calculating that premium homebuyers in the market were paying 80.6% in 2021.
Three cities in Utah and other western metropolises are close behind Boise. According to the university’s online tool, the top 10 rankings last broke out.
- Boise, Idaho, where homes sell at an 80.51% markup.
- Austin, Texas at 57.13% premium.
- Ogden, Utah, at a premium of 54.46%.
- Provo, Utah, at 49.18% premium.
- Phoenix with a premium of 48.94%.
- Spokane, Washington, at 47.61% premium.
- Las Vegas with a 47.42% premium.
- Detroit, with a premium of 47.28%.
- Salt Lake City at a 47% markup.
- Atlanta with a premium of 45.17%.
- “The danger of buying in an overvalued market is that you may have to own the home longer to generate significant financial returns,” said Eli Beracha, professor of real estate at Florida International University. “Once prices have leveled off, it’s very difficult to resell the property for a higher return.”
Forecasts for the housing market 2022
While research from Florida might give hope to those looking to buy a home in the west, other predictions fail to see that some western markets will slow down through 2022.
- Boise’s guidance came in just below Salt Lake City with forecast revenue growth of 12.9% year over year and 7.9% year over year price growth.
And this despite the fact that Utah and Idaho already have record-breaking years behind them, while the housing market in the west continues to rage. In Utah, experts warn of a “very unbalanced” housing market as demand continues to lamentably outstrip supply.
Although the real estate market cooled slightly in autumn and winter – a typical seasonal pattern – real estate experts do not forecast a market crash under today’s market conditions and see no signs of a “bubble” either.
- Contrary to what led to the 2007 market crash that fueled the Great Recession – when the US overran home construction and lending practices, leading to a subprime mortgage crisis – real estate experts say demand continues to outperform supply, especially in fast growing areas such as Utah, Idaho, and other western states.