7 Most Overvalued Housing Markets in America

Its time for buyers and investors to beware of the rapidly growing overvalued real estate markets. Builders are not building enough — they’ve focused on margins and not scale. Hence they try to focus on the strong market to earn the maximum profits.

Out of the top 100, 14 real-estate markets in the U.S. are now overvalued. An overvalued housing market has home prices that are 10% or more above the long-term sustainable level.

Here are the 7 most overvalued housing markets in America.


Home prices have ascended rapidly in the Philadelphia area (up 16.7% since early 2014, which means it has the fastest home price appreciation of any town on this top-10 list), and now they are priced at 14.2% over sustainable levels.

Washington, D.C.

Though it is a vibrant place to live, the D.C. area has its negatives, like heavy traffic and heavily priced real estate that most people can’t afford. The prices here is more than 19% over sustainable levels.

Austin, Texas

With home prices staggering 41.3% over sustainability, Austin and Round Rock real estate market is growing rapidly. Since January 2014, home prices have risen 16.3%, compared with 10.4% in 2013.


Home prices in the Houston area, which includes The Woodlands and Sugar Land, have risen more than 16% since early 2014 — and this oil capital also now has a problem with overvaluation. Home prices are now 25.4% over what’s considered sustainable.

Charleston, S.C.

Homes in historic Charleston and North Charleston are priced at 23.4% more than what’s sustainable and have grown in value 12.8% since January 2014 as compared with 5.4% in 2013.


Miami is back again after a hard hit by recession. Homes here (area includes Miami, Miami Beach and Kendall) are now priced, on average, 20.6% more than what’s sustainable.

San Antonio

This is the fourth Texas city on this list; its home prices are valued at 12.4% over sustainable levels. Comparing the prices with 6% in 2013, home price appreciation in the area (which includes New Braunfels) since early 2014 was 10.3%.