House prices are skyrocketing everywhere in the world. Both options, buying a furnished house and investing in one being constructed, will require at least half a million or a full million. If you are a blue-collar worker, it might take around 6 to 10 years to prepare financially Maxwell Drever, the Founder and Chairman of DCM, says. As for the down payment, if you start saving now, in 2 years, you will probably have enough for 20%, which will get you better loan terms.
The New Year has just begun, and demand for housing is at its peak. According to the S&P CoreLogic Case-Shiller Indices, prices of homes rose nationwide by 19.1% in October, which is extremely high than last year. In other markets, this figure was more than 25%.
There’s no single factor that has caused this increase in prices. Of course, low mortgage rates are one reason, but they too have begun to rise. Many people are exiting expensive cities like San Francisco and New York. These cities are at the top of the list of Most Expensive Cities, where prices are double the national median. The people exiting these cities are moving to cities where prices are lower. The work from home (WFH) directive put in place due to COVID-19 has allowed US citizens to become mobile, which is why they are not overly worried about making a living and paying for their expenses.
Ironically, this move on such a massive scale has caused an increase in city prices that people have set their sights on for a new life. As a result, bidding wars have become a norm, and buyers are fighting everywhere to secure a house they think is adequately priced. Because of this, houses do not stay for long on the market.
Compared to the historical numbers, demands in desirable cities for homes are steadily increasing. However, the homes are overvalued based on where they are located. To determine which cities are more expensive, two authors from the Florida Atlantic University have developed a methodology to score the cities. The conclusions are based on complex formulas that consider prices of homes dating back to a couple of years.
Based on this index, the city that carries the largest price tag is Boise, between 78.36% and 80.51%. This is higher than the second figure for Austin, i.e., 57.96%. Take a look at the top 10 list of overpriced real estate in the US and how much their prices have increased since the last year:
• Boise City, Idaho (78.36%) (–0.13%)
• Austin, Texas (57.96%) (+6.41%)
• Ogden, Utah (55.94%) (+4.76%)
• Phoenix, Ariz. (50.14%) (+3.02%)
• Provo, Utah (49.81%) (+6.63%)
• Las Vegas, Nev. (49.39%) (+2.4%)
• Spokane, Wash. (48.94%) (+5.54%)
• Atlanta, Ga. (47.53%) (+1.71%)
• Salt Lake City, Utah (47.32%) (+4.61%)
• Detroit, Mich. (47.23%) (+9.22%)
The average price of a home in Boise is $501,270. That’s half a million dollars, and with the way the market is fluctuating, there’s no knowing whether the prices will rise or fall.