Homes in 88 percent of US metros are ‘overvalued,’ claims ratings firm Fitch And the problem is only set to worsen with prices predicted to rise 3% next yearBut separate analysis by has identified the 10 most underpriced areas
American properties are selling for almost 10 percent above their true value, according to a damning new report by ratings agency Fitch.
Homes in some 88 percent of US metros were ‘overvalued’ in the second quarter of 2023, analysts said – after the median sales price of properties swelled to around $387,000 in November.
And Fitch predicts the problem will only worsen next year, with house prices set to rise by up to 3 percent as expected interest rate cuts pour fuel on the market.
But separate analysis by GoBankingRates suggests buyers can still find a bargain. Researchers at the outlet used data from property portal Zillow to identify the 20 neighborhoods where homes were most ‘underpriced.’
Cape Coral (FL) came out on top, with a typical home there underpriced by around $249,851, according to the analysis. This is because the average home value in the area is $419,840 yet the median property was listed for sale at $169,989 in 2023.
It was followed by Eau Claire (WI) and Urban Honolulu (HI) where properties were calculated to be underpriced by $110,875 and $72,819 respectively.
The top five was rounded out by Punta Gorda (FL), San Francisco (CA) and Milwaukee (WI).
But the neighborhoods appear to be an anomaly compared to the rest of the US after Fitch raised the alarm over overinflated house prices.
In all the agency expects house prices to rise by between 0 and 3 percent this year before rising again in 2025 by between 2 and 4