FAU Economist: Beware of bidding wars as home price correction looms.
Florida homes are selling for more than 17% above their long-term pricing trend according to professors at Florida Atlantic University and Florida International University.
Single-family homes, townhomes, condominiums and co-ops in the Sunshine State are overvalued by 17.17%, while Tampa Bay properties are fetching a 26.14% premium. The analysis is based on more than 25 years of housing data from Zillow, the online real estate portal.
“The results indicate that most Florida sellers will have no trouble finding favorable deals, while buyers will be at a distinct disadvantage in negotiations,” said Ken H. Johnson, Ph.D., a real estate economist in FAU’s College of Business. “Buyers in Tampa Bay and elsewhere need to be careful about getting into bidding wars. If the price is difficult to justify and the terms don’t feel right, walk away. There will always be another property.”
Johnson, a real estate agent for 12 years prior to his academic research pursuits, predicts that South Florida is approaching a peak at 13% and the coming expected correction will mean a period of flat property appreciation. Lack of inventory and continuing population growth will not make a 2007 like bubble burst.
