It’s a wild ride for the housing market right now, and prices keep going up. Now that interest rates are also going up, chances are the market will finally cool off a little bit, but only time will tell if it makes a significant difference or not. I’m always watching the market, because I would like to buy my first home someday soon- or at least someday.
Experts say that most U.S. real estate is overvalued right now, which isn’t a big surprise. What is a bit more surprising, however, is that one Michigan city is actually the third most overpriced city in the U.S. when it comes to the housing market. It’s certainly not a city I expected to see on the list.
The bad news, according to Moody’s Analytics, is that home values in 97% of U.S. cities are overvalued. The good news is that real estate in some of the most overpriced areas could fall by 10% over the next few years, they predict. That said, the nation’s most overvalued cities are pretty surprising. The No. 1 most overpriced market is currently Boise, Idaho, and the second-most overpriced market is Sherman-Denison, Texas, near the Dallas-Fort Worth area.
So, where is Michigan? According to Moody’s the third most overpriced city in the entire country is Muskegon, Michigan, where housing is 59% overvalued. What makes an area overpriced, according to Moody’s, is if property costs in the area are “well above” the normal relationship between home prices and incomes, rents and construction fees. So, that’s why areas where workers have higher incomes don’t show up on Moody’s tally as much as other areas. In general, Moody’s recommends waiting a year or two if you’re looking to buy a house, if you have the time. Buyers have already been waiting, though, so adding another one or two years might seem like an eternity, but it could be worth the wait.