Jan 25, 2022 - Economy

Idaho cities top list of most overvalued real estate markets

Most overvalued real estate markets
Data: Fitch Ratings; Chart: Will Chase/Axios

Idaho real estate prices continue to soar, with home prices in ’tater state cities topping the ranks of the country’s most-overvalued markets, according to Fitch Ratings.

  • The credit rating company compares current market prices with a proprietary estimate of “sustainable” prices, using the discrepancy to determine which cities are “overvalued” or “undervalued.”

The big picture: Idaho is in the epicenter of two powerful economic forces that have combined to result in explosive price appreciation for its relatively small markets:

  • The work-from-home revolution that's freed remote workers to relocate to areas offering the lifestyle they’re looking for.
  • Soaring wealth in nearby California, the source of many of the newcomers buying up houses.

Is it a bubble waiting to burst? Nobody knows. But, if the recent sell-off in technology stocks — a key source of Californian wealth — turns into an outright bust, don’t be surprised if the flow of Californian cash into Idaho slows a bit.

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