Jun 9, 2022 - News

Three Utah cities rank top 10 in the U.S. for overpriced houses

Illustration of a floating balloon shaped like a house

Illustration: Sarah Grillo/Axios

Housing prices in Utah are so far above historic trend lines, that three cities are currently among the 10 most overpriced markets in the country. That's based on a new analysis from Florida Atlantic University.

Driving the news: Average home prices at the end of April were about 56–65% higher than expected, according to the report which compared actual average prices to long-term pricing trends.

By the numbers: Ogden was the third most-inflated market in the country, topped only by Boise, Idaho, and Austin, Texas.

  • Provo ranked No. 7, with an average home price of $585,024, 57% above the analysis' expected average of $372,568.
  • With an average home price of $602,765, Salt Lake City ranked 10th, surpassing expected prices by about 56%.
A chart shows Salt Lake City's average home prices since 1996, as well as the projected trend based on historical prices.
A screengrab of a chart from Florida Atlantic University.

What's next: People who recently bought their house may see its value level out when the market eventually settles, said the study's coauthor Ken A. Johnson.

  • Rising interest rates are already starting to cool demand in some markets, Johnson added.

Meanwhile: The entire Wasatch Front was deemed "overvalued" in a late-May analysis commissioned by Fortune. That means home prices are rising faster than wages and other economic indicators.

Context: When the last housing bubble deflated in 2008, homes were far less overpriced than they are now.

  • Salt Lake City peaked at about 20% over the 2008 trend line, with Provo at 23% and Ogden at just 13%.

Yes, but: As long as people are still moving here, Utah's home prices probably won’t plummet this time.

  • Fortune reported northern Utah was at a "very low" risk of prices dropping in the next year, despite being overvalued.
  • Instead, Johnson told Axios, "You're going to have this prolonged period of unaffordable housing."
  • Inventory is still low and homeownership unattainable here, so anyone who managed to buy recently is probably relieved to have a house at all.

What they're saying: In 2008, "You had a huge oversupply, and not as many people moving in, so when prices started to fall there was nothing there to catch them," Johnson said. "This time around you have the opposite."

Zoom out: The American West is heavily represented in the top 10 most inflated markets.

  • Las Vegas is No. 4, with Phoenix at No. 6 and Spokane, Washington, at No. 9.
  • Utah is the only state with more than one city in the top 10.
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